Financial information for The Buckle is presented in Appendix B at the end of the book.

Required:

1. What does the Report of Independent Registered Public Accounting Firm indicate about The Buckle's internal controls?

2. In the summary of significant accounting policies, how does The Buckle define cash equivalents?

3. What is the amount of cash reported in the two most recent years? By how much has cash increased/decreased?

4. Determine the amounts The Buckle reports for net cash flows from operating activities, investing activities, and financing activities in its statement of cash flows for the most recent year. What are total cash flows for the year?

5. Compare your answers in question 4 to the increase/decrease you calculated in question 3. 

6. What does The Buckle's trend in net income versus free cash flows over the three most recent years suggest about the company's earnings quality?