Question

SUPERVALU is one of the largest grocery chains in the United States. Its February 23, 2013, statement of cash flows included the following (dollars in millions):
SUPERVALU Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in millions)


SUPERVALU Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(in millions)


REQUIRED:
a. Depreciation and amortization are added back to net earnings in the computation of net cash provided by operations. Does this mean that depreciation and amortization are sources of cash?
b. What is meant by “impairment charges”? What event would lead to such an expense? Why is it added back to net earnings?
c. Explain why the “gain on the sale” of assets is subtracted from net earnings, while “loss on sale” is added. Describe the entries that led to these disclosures.
d. Comment on the trends across time of the company’s current accounts, especially inventory and receivables.
e. Comment on the quality of the company’s earnings over the three-yearperiod.


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  • CreatedAugust 19, 2014
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