Now that you have a better understanding of the statement of cash flows and how it is prepared using the indirect method, let’s take a look at the 2010 financial information for Skechers USA, Inc. Go to Skechers’ corporate information page at www.skx.com. Scroll to the bottom of the page and under the Investor Relations heading, click SEC Filings. In the SEC Filing Keyword Search box, type “10- K” and then choose the Search button. In the list of forms, select the 10- K that was filed on 03/01/11. Click Entire Document. The statement of cash flows is on page 47 of the 10- K report.

1. Does Skechers use the direct or indirect method for its statement of cash flows? How can you tell?

2. What net income (net earnings) amounts did Skechers report for 2010 and 2009?

3. What we’re Skechers’ net cash flows from operating activities, investing activities, and financing activities for 2010 and 2009? What are the main reasons for any significant differences in those three categories between the two years?

4. Did Skechers’ statement of cash flows disclose any noncash investing and financing activities? If so, what was disclosed?