The comparative cash flow statements from Sears and Wal-Mart are presented. The amounts presented are in millions. Review both statements considering what you've learned in this chapter about the cash flow statement.

Answer the following questions:

1. 1.1 When analyzing a company's cash flow statement, which section of the statement (operating, investing or financing) do you believe is the best predictor of a company's future profitability? Why?
2. 2. Which company do you believe is healthier based on the cash flow statements presented? Provide at least two specific examples from the statements.

3. Your initial post is due four (4) days prior to the discussion due date or points will be deducted from your discussion score.

 

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Sears Holding Corporation Statements of Cash Flows (in millions) Operating activities: Net income (loss) Adjustments to convert to cash basis Net cash from operations Investing activities: Sales of property and investments Purchases of PP&E Other investing activities Net cash used in investing Financing activities: Proceeds from issuance of debt Repayments of debt Other increases (decreases) in debt Dividends paid for Sears Canada Other financing activities Net cash provided (used) by financi Effect of exchange rates Net change in cash Cash, beginning of year Cash, end of year Operating activities: Net income (loss) Adjustments to convert to cash basis Net cash from operations Investing activities: Purchases of PP&E Proceeds from disposal of PP&E Proceeds from disposal of some ops Other investing activities Net cash used in investing Financing activities: Net change in borrowings Proceeds from issuance of debt Repayments of long-term debt Dividends paid Purchase of company stock Other financing activities Net cash provided(used) by financi Effect of exchange rates Net change in cash Cash, beginning of year Cash, end of year Year Ended Jan 30, 2016 Jan 31, 2015 Feb 1, 2014 (1,128) (1,810) (1,116) (1,039) 423 7 (2,167) (1,387) (1,109) 2,730 424 995 (211) (270) (329) 173 (2) 327 1,025 (80) (1,117) (27) 2,519 (1,405) 1,091 (50) (364) (12) 250 238 Wal-Mart Stores, Inc. Statements of Cash Flows (in millions) 484 285 (3) (778) 1,028 250 1,854 7,281 9,135 Fiscal Years Ended Jan 31, 2016 Jan 31, 2015 Jan 31, 2014 15,080 17,099 16,695 12,309 11,465 6,562 27,389 28,564 23,257 (11,477) (12,174) (13,115) 635 570 727 246 671 (79) (192) (138) (10,675) (11,125) (12,526) 1,235 (6,288) 911 39 5,174 7,072 (4,432) (3,904) (4,968) (6,294) (6,185) (6,139) (4,112) (1,015) (6,683) (2,558) (2,853) (982) (16,122) (15,071) (10,789) (1.022) (514) (442) (430) (500) 9,135 8,705 7,781 7,281 664 994 (83) 238 (14) (233) 902 (38) 419 609 1,028 Sears Holding Corporation Statements of Cash Flows (in millions) Operating activities: Net income (loss) Adjustments to convert to cash basis Net cash from operations Investing activities: Sales of property and investments Purchases of PP&E Other investing activities Net cash used in investing Financing activities: Proceeds from issuance of debt Repayments of debt Other increases (decreases) in debt Dividends paid for Sears Canada Other financing activities Net cash provided (used) by financi Effect of exchange rates Net change in cash Cash, beginning of year Cash, end of year Operating activities: Net income (loss) Adjustments to convert to cash basis Net cash from operations Investing activities: Purchases of PP&E Proceeds from disposal of PP&E Proceeds from disposal of some ops Other investing activities Net cash used in investing Financing activities: Net change in borrowings Proceeds from issuance of debt Repayments of long-term debt Dividends paid Purchase of company stock Other financing activities Net cash provided(used) by financi Effect of exchange rates Net change in cash Cash, beginning of year Cash, end of year Year Ended Jan 30, 2016 Jan 31, 2015 Feb 1, 2014 (1,128) (1,810) (1,116) (1,039) 423 7 (2,167) (1,387) (1,109) 2,730 424 995 (211) (270) (329) 173 (2) 327 1,025 (80) (1,117) (27) 2,519 (1,405) 1,091 (50) (364) (12) 250 238 Wal-Mart Stores, Inc. Statements of Cash Flows (in millions) 484 285 (3) (778) 1,028 250 1,854 7,281 9,135 Fiscal Years Ended Jan 31, 2016 Jan 31, 2015 Jan 31, 2014 15,080 17,099 16,695 12,309 11,465 6,562 27,389 28,564 23,257 (11,477) (12,174) (13,115) 635 570 727 246 671 (79) (192) (138) (10,675) (11,125) (12,526) 1,235 (6,288) 911 39 5,174 7,072 (4,432) (3,904) (4,968) (6,294) (6,185) (6,139) (4,112) (1,015) (6,683) (2,558) (2,853) (982) (16,122) (15,071) (10,789) (1.022) (514) (442) (430) (500) 9,135 8,705 7,781 7,281 664 994 (83) 238 (14) (233) 902 (38) 419 609 1,028

Answer rating: 100% (QA)

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