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.
| Gap Inc., Statement of Cash Flows, in thousands Don't use plagiarized sources. Get Your Custom Essay on calculate the amount of free cash flow for gap inc for the year ended january 31 199 540253 For $10/Page 0nly | |
| CASH FLOWS FROM OPERATING ACTIVITIES | |
| Net earnings | $53,901 |
| Adjustments to reconcile net earnings to net cash provided by operating | |
| activities | |
| 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) |
| Change in operating assets and liabilities | |
| Merchandise inventory | (156,091) |
| Prepaid expenses and other | (44,736) |
| 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) |
| Acquisition of lease rights and other assets | 19,779 |
| Net cash used for investing activities | (313,852) |
| CASH FLOWS FROM FINANCING ACTIVITIES | |
| Net increase in notes payable | 44,462 |
| 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) |
| 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 |
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