Sirius vs. XM: Ratio Analysis and Cash Flow Statement Document From the previous company selection document, 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 ratio analysis and cash flow reporting to better understand how companies are performing financially and in their market. First, we will examine the cash flows of both companies and identify how much cash each generates or uses through daily operations and financing and investing activities. We will also address some of the significant events that have affected the overall cash flow of both organizations and describe changes in revenue and net income over the past few years. Finally, we will calculate current ratio, return on sales, earnings per share (EPS), debt and price-to-earnings ratios to indicate companies' solvency, liquidity and profitability, and compare the results within the industry. Cash Flow Statements Sirius' primary source of revenue comes from subscription fees, activation fees, sales of advertising on non-music channels, and direct sales of Sirius radios and accessories. Service costs include satellite and broadcast, programming and content, customer service and billing, as well as costs associated with equipment sales (Sirius Satellite Radio Inc Summary). As of December 31, 2004, Sirius' total cash flow from operating activities was negative $334,463. Total cash flow in investing activities was negative $92,852, while total cash flow from financing activities was positive $660,227. As the data shows, Sirius posted operating and investment losses... mid-paper... from the financial news site. Retrieved December 30, 2005, from website: http://biz.yahoo.com/ap/051027/earns_xm_satellite.html?.v=5U.S. Securities and Exchange Commission. Sirius Satellite Radio Inc. and subsidiary's consolidated financial statements. Retrieved December 14, 2005, from website: http://www.sec.gov/cgi-bin/browse-edgar?company=&CIK=siri&filenum=&State=&SIC=&owner=include&action=getcompanyXM: Cash Flow for XM Satellite Radio Holdings Inc.-Yahoo! Finance. Retrieved December 29, 2005, from website: http://finance.yahoo.com/q/cf?s=XMSR&annualXM: Summary of XM Satellite Radio Holdings Inc.- Yahoo! Finance. Retrieved December 26, 2005, from website: http://biz.yahoo.com/prnews/051027/nyth111.html?.v=28XM: Consolidated Statement of Income. Retrieved January 2, 2006 from website: http://www.xmradio.com/pdf/xm_Q4_2004_earning_financials.pdf