Interpreting a statement of cash flows based on the direct method for presenting cash flow from operations

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Interpreting a statement of cash flows based on the direct method for presenting cash flow from operations Refer to information about CVS Caremark Corporation in the preceding problem. Consider the 52 weeks ending December 30, 2006, as the year 2006.

a. What was the change in accounts receivable during 2006?

b. Inventories increased by $624.1 during 2006. What was the change in accounts pay able for inventories during 2006?

c. By how much did the amount paid for interest during 2006 differ from interest expense? Give the amount and indicate whether the amount paid exceeded, or was less than, expense.

d. Note that cash flow from operations increased by about 10% between 2005 and 2006 but nearly doubled between 2006 and 2007. What cause(s) can u suggest for this dramatic change?


Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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