Net Income Retained Earnings and Dividends Use the following

Net Income, Retained Earnings, and Dividends Use the following data (in millions) for Oracle Corporation (ORCL), for a recent year to answer the questions below: Retained earnings, beginning of year $25,503 Retained earnings, end of year Net cash flows from operating activities 14,336 Net increase in cash Net cash flows from financing activities8,658 a. Determine the amount of earnings retained in Oracle for the year, assuming no dividends were paid during the year. 26,503 3,947 25,503 | X million b. Determine the net cash flows used for investing activities for the year. million

Solution

1.Ending retained earnings=Beginning retained earnings+Net income-Dividends

Hence Net income=(26503-25503)

=$1000 million.

2.Net increase in cash=Cash flow from operating activities+Cash flow from financing activiites+Cash flow from investing activities

Hence Cash flow from investing activities=(3947-14336-8658)

=($19047 million).