This chapter explained that many companies

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Sirius XM Radio Inc. was created by a merger between Sirius Radio and XM Radio, in July 2008. Sirius Radio was formed in 1990, and XM Radio began in 1992, although these companies did not generate any significant amounts of revenue in the early years of their existence. Neither XM, Sirius, nor the combined company, Sirius XM Radio, earned a profit until 2010. Its cumulative net losses totaled $10 billion by the end of 2010. Sirius XM's statements of cash flows for 2008, 2009, and 2010 follow.

Required: 

a. This chapter explained that many companies that report net losses on their earnings statements report positive cash flows from operating activities. How do Sirius XM's net incomes compare to its cash flows from operating activities? 

b. Based only on the information in the statements of cash flows, does Sirius XM appear to be growing the capacity of its business? Explain. 

c. In 2010 Sirius XM paid off over $1.262 billion of long term borrowings and $142 million of related-party long term borrowings. Where did it get the funds to repay this debt? 

d. All things considered, based on the information in its statements of cash flows, did Sirius XM's cash position appear to be improving or deteriorating?

Reference no: EM13930335

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