Financial information for Buckle is presented in Appendix B at the end of the book.

Required:
1. What does the Report of Independent Registered Public Accounting Firm indicate about Buckle’s internal controls?
2. In the summary of significant accounting policies, how does Buckle define cash equivalents?
3. What is the amount of cash reported in the two most recent years? By how much has cash increased/decreased?
4. Determine the amounts Buckle reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year?
5. Compare your answers in Question 4 to the increase/decrease you calculated in Question 3. (Note: Include any effect of exchange rates on cash as an additional cash flow in Question 4.)
6. What does Buckle’s trend in net income versus free cash flows over the three most recent years suggest about the company’s earnings quality?