Interpreting a statement of cash flows based on the direct method for presenting cash flow from operations Exhibit 5.32 shows the consolidated income statements for CVS Caremark Corporation for three recent years. CVS Caremark uses the direct method for presenting its cash flows from operations, which appears in Exhibit 5.33. In the following, we refer to the 52 weeks ending December 29, 2007, as the year 2007.

a. What was the change in accounts receivable during 2007?

b. Accounts payable for inventories increased by $181.4 during 2007. What was the change in inventories during 2007?

c. By how much did the amount paid for interest during 2007 differ from interest expense? Give the amount and indicate whether the amount paid exceeded, or was less than, expense.

d. Note that income increased by a bit more than 10% between 2005 and 2006 but nearly doubled between 2006 and 2007. What cause(s) can u suggest for this dramaticchange?

CVS Caremark Corporation Consolidated Statements of Operations EXHIBIT 5.32 Fscal Year Ended Dec. 29, 2007 tsz woeks Fiscal Yar finded Dec 30, 2006 Fecal Year Endud Dac 31, 2006 S2 wusks milluma eapt pur sharn amunts 5 76,329.5 Net evenues 43,821.4 27.006.7 Cost of reverues Gross profit Total operating expensas Operating protit 32,079 2 60,221.8 27.312.1 16,107.7 11,742.2 9694.6 11,314.4 7,675.1 2,0195 9:00E'6 4,793.3 2,441.6 434.6 Interest expense, net Eamings before ncome tax provision income tax provesion Net earnings 215.8 T10.5 1,909 0 4,358.7 2,225.8 6843 1,721.7 8569 1,224.7 2,637.0 1,368.9 Preference dividendk, ret of ncome tax benetit Net armings avalable to common shariholders 13.9 14.1 12106 14.2 2,622.8 1,355.0 BASIC EARNINGS PER COMMON SHAHE Net earnings 149 1.97 165 1,328.2 20.6 B11.4 Bupursno seys uuAO abeae paubiaM DILUTED EARNINGS PER COMMON SHARE Net earnings Weighted average comman shares outstandng Dlvidends declared per common share 1.92 1.60 1.45 1,371.8 151.7 0.35500 B41.6 %24 0.22675 0.14500