Answer:
Marriott International, Inc.
Selection of whether activity is investing or financing and the direction of the effects on cash flows (+ for increases cash; - for decreases cash):
Activity Type of activity Effect on cash
(millions of dollars)
a. Additional borrowing from banks financing + $1,482
b. Purchase of investments investing - $1
c. Sale of assets and investments investing + $218
(assume sold at cost)
d. Issuance of stock financing + $34
e. Purchases of property plant,
and equipment investing - $199
f. Payment of debt principal financing - $326
g. Dividends paid financing - $374
h. Receipt of principal payment financing + $67
on a note receivable
Explanation:
When Marriott International, Inc. prepares its statement of cash flows, it usually classifies the cash flow activities into three main categories. One is the operating activities section. Two is the investing activities section. And the third one is financing activities. Sometimes, the reconciliation to the cash balance is added, including some non-cash flow activities. The purpose of preparing the statement of cash flows in such sections is to group relevant activities together to enable users of the financial statements to make informed decisions. It is very important to make the separation since investing and financing activities are not the normal business of the entity, unless it is into such businesses like investment and finance houses and banks.
