Refer to the financial statements and related disclosure notes of The Kroger Company for the fiscal year ending January 30, 2018. You can locate the report online from “investor relations” at www.kroger.com.
Notice that Kroger’s net income has declined over the three years reported. To supplement their analysis of profitability, many analysts like to look at “free cash flow.” A popular way to measure this metric is “structural free cash flow” (or as Warren Buffett calls it, “owner’s earnings”), which is calculated as net income from operations, plus depreciation and amortization, minus capital expenditures.

Required:
Determine free cash flows for Kroger in each of the three years reported. Compare that amount with net income each year. What pattern do you detect?