The financial statements of M&S (GBR) are presented in Appendix A. The complete annual report, including the notes to the financial statements, is available online.

Instructions Refer to M&S’s financial statements and the accompanying notes to answer the following questions.

(a) Which method of computing net cash provided by operating activities does M&S use? What were the amounts of net cash provided by operating activities for the years 2012 and 2013? What were the two most significant items in the cash generated from operations in 2013?

(b) What was the most significant item in the cash flows used for investing activities section in 2013? What was the most significant item in the cash flows used for financing activities section in 2013?

(c) Where is “deferred income taxes” reported in M&S’s statement of cash flows? Why does it appear in that section of the statement of cash flows?

(d) Where is depreciation reported in M&S’s statement of cash flows? Why is depreciation added to net income in the statement of cash flows?

Data From Appendix A 

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APPENDIX A Specimen Financial Statements: Marks and Spencer Group plc Financial statements Consolidated income statement Revenue Operating profit Finance income Finance costs Profit before tax Income tax expense Profit for the year Attributable to: Equity shareholders of the Company Non-controlling interests Basic earnings per share Diluted earnings per share Notes 2,3 2,3 52 weeks ended 30 March 2013 m 10,026.8 52 weeks ended 31 March 2012 m 9,934.3 756.0 746.5 26.5 (218.2) 48.3 (136.8) 564.3 658.0 (106.3) (168.4) 458.0 489.6 466.7 513.1" (8.7) (23.5) 458.0 489.6 29.2p 32....... 29.0p 32.2p