Financial Statement Analysis Case Carrefour Group Carrefour Group (FRA), the top retailer in Europe (second worldwide), recently had €108.629 billion in sales. It has more than 495,000 employees worldwide, with operations in 31 countries. It is the seventh largest employer worldwide, with 15,430 stores. Carrefour provided the following information in a recent annual report related to its property and equipment.

Instructions

(a) What method of depreciation does Carrefour use?

(b) Does depreciation and amortization expense cause cash flow from operations to increase? Explain.

(c) What do the schedule of cash flow measures indicate?

Transcribed Image Text:

Carrefour Group (in millions) Notes to the Financial Statements (in part) (3) Tangible fixed assets In accordance with IAS 16 "Tangible Fixed Assets," land, buildings, equipment, fixtures and fittings are valued at their cost price at acquisition, or at production cost less depreciation and loss in value. The cost of borrowing is not in- cluded in the acquisition price of fixed assets. Tangible fixed assets in progress are posted at cost less any identified loss in value. Depreciation of these assets begins when the assets are ready for use. Tangible fixed assets are depre- ciated on a straight-line basis according to the following average useful lives: Construction: Buildings 40 years Grounds 10 years Car parks 6-and-two-thirds years Equipment, fixtures, fittings and installations 6-and-two-thirds years to 8 years Other fixed assets 4 to 10 years Note 8: Depreciation, amortization and provisions Depreciation of tangible fixed assets Current Year 1,623 Prior Year Change 1,484 9.4%