Sirius vs. XM: Ratio Analysis and Statement of Cash Flows Paper
From the previous company selection paper, we are now familiar with the selected satellite radio broadcasting companies, Sirius and XM Satellite Radio. Our group will now take a further, in-depth look at the ratio analysis and statement of cash flows to get a better understanding of how the companies are doing financially and with in their market. First, we will be reviewing the cash flows for both companies and identifying how much cash was generated or used by each through everyday operations, and financing and investing activities. We will also address some of the significant events that have affected the overall cash flow for both organizations and describe the changes in revenue and net income over the last several years. Last, we will be calculating the current ratio, return on sales, earnings per share (EPS), debt ratio, and price earnings ratio to state the companies' solvency, liquidity, and profitability and will compare the results within the industry.
Review of Cash Flow Statements
Sirius' primary source of revenue comes from subscription fees, activation fees, sales of advertising on non-music channels and the direct sale of Sirius radios and accessories. Costs of services include satellite and transmission, programming and content, customer service and billing, and costs associated with the sale of equipment (Summary of Sirius Satellite Radio Inc). As of December 31, 2004, Sirius' total cash flow from operating activities was a negative $334,463. Total cash flow in investing activities was a negative $92,852, and total cash flow from financing activities was a positive $660,227. As the data shows, Sirius had losses in operat ...