Cineworld Executive Summary

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The net cash outflows in investing activities were £49.5m in 2017 compare again to June 2016 £38.4m. Due to the increase in revenue compare to June 2017, Cineworld Group Plc offer to acquire a 100% of Regal Entertainment Group at a price of US $23.00 per share. This Company will help Cineworld to expand into new markets, it’s based in the US and operates one of the largest geographically diverse theatre in the United states with 7315 screens in 561 theatres in 43 states such as Guam, Saipan, America Samoa and the district of Columbia. Regal partners are Coco Cola, Atom tickets, movie tickets.com, Fandango. The potential acquisition of Regal would therefore help provide Cineworld with highly attractive platform in the world largest cinema market, …show more content…
(Cineworld 2016/2017E/1)

3. Analysis

3.1 Operating Activities

Operating activities represent the transactions that occur because of doing business. Examples of operating activities include the transfer of cash between customers and the company, and cash movements between the company and suppliers, employees, and other businesses. In accounting, this cash flow of operating activities has specific reporting standards (McGew, 2017).

Net cash generated from operating activities in 2016 by the Group was notably less than the year 2015, from £165.9m to £150.1m, this is a 9.5% decrease. Less cash was generated even though the operating profit of 2016 (112.8m) was higher than the 2015 figure (103.1m) by 9.4%. This is a perfect example that higher profits do not mean higher cash generated or that the company is liquid.

When the impact of the non- cash items is removed, the operating profit for the year of 2016 is £170.1m while for the year 2015 it is £154.2m, this is a 10% increase between both years. Even though profits have increased while the cash generated did not increase means that the increase is because of the movement in the working capital more specifically the trade …show more content…
Cash flows from investing activities are important because they give indications of future growth in revenues. A negative amount of cash flows from investing activities indicate that the company is investing in capital assets therefore it future earnings are expected to grow. Cash flows from investing activities represent the change in an entities cash position resulting from investments in the financial markets and operating subsidiaries, and changes resulting from funds spent on investments in capital assets such as plant and equipment ("Cash Flows from Investing Activities",

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