Cash Flow Analysis

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In this Assignment, you will be assessed based on the following outcome:MT482-3:Analyze cash flow measures for insight into all business activities.In this Assignment, you will clearly see the connection between cash flow and the actual operation of a business. You will better understand the impact of cash management and develop the skills to understand its importance.Locate the Lands’ End Case 7-1 on page 455 of your text. Be sure to submit thoughtful and substantial answers to the questions following each case.

Required:

a. Lands’ End recently implemented a
strategy of filling nearly all orders when the order is placed. In what
year do you believe the company implemented this strategy and how is the
strategy reflected in the information contained in the statement of
cash flows?

b. Explain how the following items reconcile net income to net cash flows from operating activities:

(1) Depreciation

(2) Receivables

(3) Inventory

(4) Reserve for returns

c. Calculate free cash flows for each year shown.

d. How does Lands’ End use its free cash flow? Do you think its use of free cash flows reflects good financial strategy?

CHECK
(c) Yr 9, $27,510

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