An excerpt from the statement of cash flows from the fiscal 2000 annual report of Nautica Enterprises, an apparel manufacturer, is shown as Exhibit 25 . An excerpt from the statement of cash flows from the company’s fiscal 2001 annual report is shown in Exhibit 26 . Use these two excerpts to answer the questions below.

1. What amount does Nautica report as operating cash flow for the year ended 4 March 2000 in Exhibit 25 ? What amount does Nautica report as operating cash flow for the same year in Exhibit 26 ?

2. Exhibit 25 shows that the company had investing cash flows of $21,116 thousand from the sale of short-term investments for the year ended 4 March 2000. Where does this amount appear in Exhibit 26 ?

3. As actually reported ( Exhibit 26 ), how did the company’s operating cash flow for fiscal year 2001 compare with that for 2000? If Nautica had not changed the classification of its short-term investing activities, how would the company’s operating cash flows for fiscal year 2001 have compared with that for 2000?

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EXHIBIT 25 Excerpt from Nautica Enterprises' Consolidated Statement of Cash Flow from Annual Report, filed 27 May 2000 (amounts in thousands) Cash flows from operating activities Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities, net of assets and liabilities acquired Minority interest in net loss of consolidated subsidiary Deferred income taxes Depreciation and amortization Provision for bad debts Changes in operating assets and liabilities Accounts receivable Inventories Prepaid expenses and other current assets Other assets Accounts payable: trade Accrued expenses and other current liabilities Income taxes payable Net cash provided by operating activities Year ended 4 March 2000 $46,163 (1,035) 17,072 1,424 (6,562) (3,667) (20) (2,686) (548) 9,086 3,458 62,685