Refer to the Foot Locker, Inc., consolidated financial statements in Appendix B at the end of this book. Focus on fiscal 2007 (year ended February 2, 2008).

1. What is Foot Locker, Inc.’s main source of cash? Is this good news or bad news to Foot Locker managers, stockholders, and creditors? What is Foot Lockers main use of cash? Good news or bad news? Explain all answers in detail.

2. Explain briefly the three main reasons why net cash provided by operations differs from net income.

3. Did Foot Locker, Inc., buy or sell more fixed assets during fiscal 2007? How can you tell?

4. Identify the largest two items in the financing activities section of the Consolidated Statement of Cash Flows. Explain the company’s probable reasoning behind these two expenditures.