Question

The statement of cash flows for Chico’s FAS, Inc., for the years ended January 31, 2009, February 2, 2008, and February 3, 2007, appears on the following page.
CHICO’S FAS, INC., AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS


Answer the following questions:
1. Does Chico’s use the direct or the indirect method of preparing the statement of cash flows?
2. Did receivables increase or decrease during the most recent fiscal year?
3. Why is depreciation, a noncash expense, included on the statement of cash flows?
4. On two of the three years’ statements, inventory is shown as a negative number (subtracted). Describe what happened to the balance in the inventory account during each of those years.
5. Did the balance in accounts payable increase or decrease during the most recent year? Explain.
6. Do you think Chico’s is expanding? Find some numbers to support your answer.
7. Calculate Chico’s free cash flow for all three years. What do these values indicate?
8. Do you see any particular risks indicated by Chico’s cash flowpatterns?


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  • CreatedSeptember 01, 2014
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