The 2012 statement of cash flows for Macy s reports dollars
The 2012 statement of cash flows for Macy’s reports (dollars in millions) net cash from operating activities of $2,261 (2012), $2,093 (2011), and $1,506 (2010). Included on the statement of cash flows (indirect method) in the computation of net cash from operating activities are adjustments for inventory of ($191) in 2012, ($359) in 2011, and ($143) in 2010.

REQUIRED:
Explain the nature of these adjustments and what they tell us about Macy’s inventory balances in 2012, 2011, and 2010. Discuss the cash flow implications of these inventory adjustments.

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