with this case we review the profitability of several specialty 284360

With this case, we review the profitability of several specialty retail stores. The companies reviewed and the year end dates are as follows:

1. Abercrombie & Fitch Co.

(January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week)

?~?~Abercrombie & Fitch Co. …is a specialty retailer that operates stores and websites selling casual sportswear apparel.’’ 10 K

2. Limited Brands, Inc.

(January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week)

?~?~We operate in the highly competitive specialty retail business.’’ 10 K

3. GAP, Inc.

(January 31, 2009—52 week; February 2, 2008—52 week; February 3, 2007—53 week) ?~?~We are a global specialty retailer offering clothing, accessories, and personal care products.’’ 10 K

Required

a. Comment on the difference between net cash provided by operating activities and net income.

Speculate on which number is likely to be the better indicator of long term profitability.

b. Comment on the data reviewed for each firm.

c. Do any of these firms appear to have a cash flow problem? Comment.