Question

Walmart			Target
Common size comparative analysis-Cash Flow			Common size comparative analysis- Cash Flow
For the year ended January 31, 2018			For the year ended February 3, 2018
Details	2018		Details	2018
	$			$
Net Income	$9,862,000		Net Income	$2,934,000
Cash Flows-Operating Activities			Cash Flows-Operating Activities
Depreciation	$10,529,000		Depreciation	$2,445,000
Net Income Adjustments	$4,042,000		Net Income Adjustments	$229,000
Changes in Operating Activities			Changes in Operating Activities
Accounts Receivable	($1,074,000)		Accounts Receivable	0
Changes in Inventories	($140,000)		Changes in Inventories	($348,000)
Other Operating Activities	0		Other Operating Activities	($168,000)
Liabilities	$4,457,000		Liabilities	$1,757,000
Net Cash Flow-Operating	$28,337,000		Net Cash Flow-Operating	$6,923,000
Cash Flows-Investing Activities			Cash Flows-Investing Activities
Capital Expenditures	($10,051,000)		Capital Expenditures	($2,533,000)
Investments	0		Investments	($55,000)
Other Investing Activities	$991,000		Other Investing Activities	($487,000)
Net Cash Flows-Investing	($9,060,000)		Net Cash Flows-Investing	($3,075,000)
Cash Flows-Financing Activities			Cash Flows-Investing Activities
Sale and Purchase of Stock	($8,304,000)		Sale and Purchase of Stock	($938,000)
Net Borrowings	($1,437,000)		Net Borrowings	($1,441,000)
Other Financing Activities	($3,320,000)		Other Financing Activities	0
Net Cash Flows-Financing	($19,875,000)		Net Cash Flows-Financing	($3,717,000)
Effect of Exchange Rate	$487,000		Effect of Exchange Rate	0
Net Cash Flow	($111,000)		Net Cash Flow	$131,000

·         What were the companies’ cash flows from operations? Were they positive?

·         Were operating cash flows smaller or larger than net income?

·         What are the major differences between operating cash and net income?

·         Did the company purchase new property and equipment (‘Capital expenditures’) during the years?

·         Did the company issue new debt during the year or was the debt repaid? (Hint: We must sometimes sum one or more-line items on this statement to determine total net debt activity.)

·         Did the company issue new stock?

·         Did the company pay dividends?

Answer 1

1)	The cash flows from operations were:
	Wallmart- $28,337,000
	Target- $6,923,000
	Yes, they were positive.
2)	Operating cash flows were larger than net income.
3)	Major differences between operating cash flow and net income are:
	*Operating cash flow excludes depreciation, which is a non-cash
	expense.
	*Operating cash flow provides for changes in the current assets and current
	liabilities.
4)	Yes, the companies purchased new property and equipment during the year.
	The are reported as capital expenditures in the 'Investing Section' of the
	statement of cash flows.
5)	Only 'net borrowings' are shown and it can be presumed that the companies
	have both issued new debt and repaid debt.
6)	It is mentioned as 'sale and purchase of stock' which description tells that
	new stock was issued.
7)	No, the companies did not pay dividends.