Calculate the amount of free cash flow for Gap Inc., for the year ended January 31, 1998. State any assumptions that you make in your calculations.
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Gap Inc., Statement of Cash Flows, in thousands |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
Net earnings |
$53,901 |
|
Adjustments to reconcile net earnings to net cash provided by operating |
|
|
activities |
|
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Depreciation and amortization |
269,706 |
|
Tax benefit from exercise of stock options by employees and from vesting |
|
|
of restricted stock |
23,682 |
|
Deferred income taxes |
(13,706) |
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Change in operating assets and liabilities |
|
|
Merchandise inventory |
(156,091) |
|
Prepaid expenses and other |
(44,736) |
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Accounts payable |
63,532 |
|
Accrued expenses |
107,365 |
|
Income taxes payable |
(8,214) |
|
Deferred lease credits and other long-term liabilities |
69,212 |
|
Net cash provided by operating activities |
$844,651 |
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
Net maturity (purchase) of short-term investments |
174,709 |
|
Net purchase of long-term investments |
(2,939) |
|
Net purchase of property and equipment |
(465,843) |
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Acquisition of lease rights and other assets |
19,779 |
|
Net cash used for investing activities |
(313,852) |
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CASH FLOWS FROM FINANCING ACTIVITIES |
|
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Net increase in notes payable |
44,462 |
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Net issuance of long-term debt |
495,890 |
|
Issuance of common stock |
30,653 |
|
Net purchase of treasury stock |
(593,142) |
|
Cash dividends paid |
(79,503) |
|
Net cash used for financing activities |
(101,640) |
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Gap Inc., Income Statement, in thousands |
|
|
Net sales |
$6,507825 |
|
Costs and expenses |
|
|
Cost of goods sold and occupancy expenses |
4,021,541 |
|
Operating expenses |
1,635,017 |
|
Net interest income |
(2,975) |
|
Earnings before income taxes |
$842,242 |
|
Income taxes |
320,341 |
|
Net earnings |
$533,901 |