Analysing the cash flow statement would be a great place to first look when initially analysing a company. It is difficult for a company to manipulate the cash flow statements resulting in good place to find the real numbers. The cash flow statement is very indicative of how well the company can convert net income into cash, it also helps to determine if a company is strong or weak. Panera is realizing a positive net cash flow and is a strong company from their statements. To receive a deeper analysis it is good to look into the three sections of the cash flows, cash flows from operations, cash flow from investing and cash flow from financing. In the cash flows from operations (CFO), Panera has had strong and positive growth in cash flow …show more content…
It is a good sign that Panera has a negative number for CFI showing that they are investing in there stores and attaining new assets. A majority of Panera’s investments are additions to property and equipment, with around 50% assigned to acquiring new bakery-cafes each year. Panera has had an upward trend in investing in new technology in order to achieve Panera 2.0 a strategic movement to update many stores. The plan includes adding many kiosk and multiple new ordering techniques involving a large use of computers and software programs to take these new ordering style, which is in sync with the upward trend of computer and software on the balance sheet. A negative CFI a good sign that shows Panera is not only investing in new stores but also ways to revamp existing stores with the possibility of lowering other expenses, while making the store a better experience for …show more content…
Unlike the other two sections of the cash flow statement the CFF has tended to be slightly more sporadic with a downward trend from 2010-2012 to a large spike in 2013 and dropping again in 2014. Panera’s strategy of returning capital to investors is the main driver in the sporadic trend. .Panera uses a stock buyback option instead of dividends. During 2012, Panera approved a new three year deal of buying back stock for 600 million but chose to only purchase a small amount of stock. (10-K,2012) While in 2013, Panera bought back and extremely large amount of stock. Panera is not a company that takes on debt with 2014 being the only exception to help fund some property and equipment while maintaining a high repurchase of common