Refer to the 10-K reports of Under Armour, Inc., and Columbia Sportswear that are available for download from the companion website at CengageBrain.com.
Required:
1. What method of computing net cash flow from operating activities did Under Armour use? What method of computing net cash flow from operating activities did Columbia use? Would you expect these to be the same? Why or why not?
2. Find net cash provided by operating activities for each company:
a. What was the amount of cash provided by operating activities for the year ending December 31, 2016 for Under Armour? What was the amount of cash provided by operating activities for the year ending December 2016 for Columbia?
b. What was the most significant adjustment that caused a difference between net income and net cash provided by operating activities?
c. Comparing net income to net cash provided by operating activities, can you draw any conclusions as to the quality of each company's earnings?
3. Refer to each company's investing and financing activities. What were some of the more significant uses of cash? What were some of the more significant sources of cash?
4. Does each company match the time commitments of inflows and outflows of cash well?
5. Are debt and equity likely to be available as inflows of cash in the near future?