1. Based on the information in the company's most recent annual report, determine each of the following: a. What is the net cash flows from operating activities reported by the company at the end of the most recent year? b. What is the net cash flows from investing activities reported by the company at the end of the most recent year? c. What is the net cash flows from financing activities report by the company at the end of the most recent year? d. What is the net increase (or decrease) in cash during the year? 2. Evaluate the company's cash inflows and outflows. Describe all of the inflows and outflows and evaluate the flows (For example, did the company purchase assets that benefited the company?) URBAN OUTFITTERS, INC. Consolidated Statements of Cash Flows (in thousands) Fiscal Year Ended lamar 168,096 s 298,003 108,263 117,986 128,408 112,256 190,652 1,451 21,109 13,911 14,611 1,613 (11.414) 18,104 8,329 14,517 3,544 3,492 11,410 4,037 (7,825) (39,101) (16,308) 22,661 (209,263) 273,893 (4,012) (21.696) 8,605 34,012 (21,744) (8,644) 12,967 45.516 446,624 303.059 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Non-cash lease expense Provision (benefit) for deferred income taxes Share-based compensation expense Goodwill impairment Store impairment Loss on disposition of property and equipment, net Changes in assets and liabilities: Receivables Inventory Prepaid expenses and other assets Payables, accrued expenses and other liabilities Operating lease liabilities Net cash provided by operating activities Cash flows from investing activities: Cash paid for property and equipment Cash paid for marketable securities Sales and maturities of marketable securities Net cash used in investing activities Cash flows from financing activities: Proceeds from the exercise of share-based awards Share repurchases related to share repurchase program Share repurchases related to taxes for share-based awards Net cash used in financing activities Effect of exchange rate changes on cash and cash equivalents (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental cash flow information: Cash paid during the year for: Income taxes Non-cash investing activities--Accrued capital expenditures (217,433) (397,220) 428,508 (186.14) (114,924) (396,646) 267,072 (244,498) (83,813) (281,385) 243,818 (121380) 974 (217,421) (5.600) (222,047) (2,122) (136,421) 358,260 221,839 13,618 (121,397) (10.245) (118,024 (8,062) 76,040 282,220 358,260 (157,044) (2.182) (159,226 11,627 34,080 248,140 282.220 74,429 10,497 $ s 102,211 $ 7,193 5 83,986 10,144 Marketable Securities All of the Company's marketable securities as of January 31, 2017 and January 31, 2016 are classified as available-for-sale and are carried at fair value, which approximates amortized cost. Interest on these securities, as well as the amortization of discounts and premiums, is included in "Interest income in the Consolidated Statements of Income. The Company records unrealized gains and losses on these securities (other than mutual funds held in the rabbi trust for the Urban Outfitters, Inc. Non-qualified Deferred Compensation Plan (See Note 4, "Marketable Securities")) as a component of "Other comprehensive (loss) income" in the Consolidated Statements of Comprehensive Income and in "Accumulated other comprehensive loss" within "Shareholders' equity" in the Consolidated Balance Sheets until realized, except when the Company considers declines in value to be other than temporary. Other than temporary impairment losses related to credit losses are considered to be realized losses. Mutual funds held in the rabbi trust have been accounted for under the fair value option, which results in all unrealized gains and losses being recorded in Interest income" in the Consolidated Statements of Income. When available-for-sale securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. Securities classified as non-current assets have maturity dates greater than one year from the balance sheet date. Accounts Receivable Accounts receivable primarily consists of amounts due from our wholesale customers as well as credit card receivables outstanding with third-party credit card vendors. The activity of the allowance for doubtful accounts for the years ended January 31, 2017, 2016 and 2015 was as follows: Halamaa heginning of year Deductie end of year Additions 4,892 $ 664 $ 588 $ 850 (4.968) (6,764) (5,527) $ 6,578 4,666 664 $ 1.711 $ 850 Year ended January 31, 2017 Year ended January 31, 2016 Year ended January 31, 2015 Inventory Inventory, which consists primarily of general consumer merchandise held for sale, is valued at the lower of cost or net realizable value. Cost is determined on the first-in, first-out method and includes the cost of merchandise and import related costs, including freight, import taxes and agent commissions. A periodic review of inventory is performed in order to determine if inventory is properly stated at the lower of cost or net realizable value. Factors the Company considers in its review, such as future expected consumer demand and fashion trends, current aging, current and anticipated retail markdowns or wholesale discounts and class or type of inventory, are analyzed to determine estimated net realizable value. Criteria that the Company considers in its review of aging trends include average selling cycle and seasonality of merchandise, the historical rate at which F-9 URBAN OUTFITTERS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (in thousands, except share and per share data) return rate is materially different than the Company's estimate, sales returns would be adjusted in the future. The activity of the sales returns reserve for the years ended January 31, 2017, 2016 and 2015 was as follows: beginning of Balance end year Deducties $ 24.385 $ 24.882 Additions 105,909 96,707 80.390 S (105,412) (92.126) (77.675) 19,804 17.089 S24,385 $ S 19.804 Year ended January 31, 2017 Year ended January 31, 2016 Year ended January 31, 2015 Cost of Sales Cost of sales includes the following: the cost of merchandise; merchandise markdowns; obsolescence and shrink provisions; store occupancy costs, including rent and depreciation; delivery expense; inbound and outbound freight; customs related taxes and duties; inventory acquisition and purchasing costs; design costs; warehousing and handling costs and other inventory acquisition related costs. Selling, General and Administrative Expenses Selling, general and administrative expenses includes expenses such as: direct selling and selling supervisory expenses; marketing expenses; various corporate expenses such as information systems, finance, loss prevention, talent acquisition, home office and executive management expenses; share-based compensation expense; and other associated general expenses. Shipping and Handling Revenues and Costs The Company includes shipping and handling revenues in net sales and shipping and handling costs in cost of sales. The Company's shipping and handling revenues consist of amounts billed to customers for shipping and handling merchandise. Shipping and handling costs include shipping supplies, related labor costs and third-party shipping costs. Advertising The Company expenses the costs of advertising when the advertising occurs, except for direct-to-consumer advertising, which is capitalized and expensed when the catalog is mailed or the content is published on the Company's websites and mobile applications. Advertising costs primarily relate to our Retail segment marketing expenses which are comprised of web marketing, catalog printing, paper, postage and other costs related to production of photographic images used in our catalogs, on our websites, mobile applications and in our social media campaigns. If there is no expected future benefit, the cost of advertising is expensed when incurred. Advertising costs reported as prepaid expenses were $2,087 and $3,724 as of January 31, 2017 and 2016, respectively, and are included in "Prepaid expenses and other current assets" in the Consolidated Balance Sheets. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (in thousands, except share and per share data) 1. Nature of Business Urban Outfitters, Inc. (the "Company" or "Urban Outfitters"), which was founded in 1970, was incorporated in the Commonwealth of Pennsylvania in 1976. The principal business activity of the Company is the operation of a general consumer product retail, wholesale and subscription business selling to customers through various channels including retail locations, websites, catalogs and mobile applications. As of January 31, 2020 and 2019, the Company operated 634 and 620 stores, respectively. Stores located in the United States totaled 522 as of January 31, 2020 and 522 as of January 31, 2019. Operations in Europe and Canada included 78 stores and 34 stores as of January 31, 2020, respectively, and 63 stores and 35 stores as of January 31, 2019, respectively. In addition, the Company's Wholesale segment sold and distributed apparel and home goods to approximately 2,300 department and specialty stores worldwide, digital businesses and to the Company's Retail segment. The Company's Subscription segment consists of the Nuuly brand, which is a monthly women's apparel subscription rental service that launched on July 30, 2019. 2. Summary of Significant Accounting Policies Fiscal Year-End The Company operates on a fiscal year ending January 31 of each year. All references to fiscal years of the Company refer to the fiscal years ended on January 31 in those years. For example, the Company's fiscal 2020 ended on January 31, 2020 Principles of Consolidation The Consolidated Financial Statements include the accounts of the Company and all of its subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation Lise of Estimates The preparation of financial statements, in conformity with accounting principles generally accepted in the United States ("GAAP"), requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents are defined as cash and short-term highly liquid investments with maturities of less than three months at the time of purchase. These short-term highly liquid investments are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. As of January 31, 2020 and 2019, cash and cash equivalents included cash on hand, cash in banks, money market accounts and marketable securities with maturities of less than three months at the time of purchase. Marketable Securities All of the Company's marketable securities as of January 31, 2020 and January 31, 2019 are classified as available for sale and are carried at fair value, which approximates amortized cost. Interest on these securities, as well as the amortization of discounts and premiums, is included in "Interest income in the Consolidated Statements of Income. The Company records unrealized gains and losses on these securities (other than mutual funds held in the rabbitrust for the Urban Outfitters, Inc. Non-qualified Deferred Compensation Plan (See Note 4, "Marketable Securities")) as a component of "Other comprehensive (loss) income" in the Consolidated Statements of Comprehensive Income and in "Accumulated other comprehensive loss within "Shareholders' equity in the Consolidated Balance Sheets until realized, except when the Company considers declines in value to be other than temporary Other than temporary Impairment losses related to credit losses are considered to be realized losses. Mutual funds held in the rabbi trust have been accounted for under the fair value option, which results in all unrealized gains and losses being recorded in "Interest income in the Consolidated Statements of Income. When available for sale securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. Securities classified as non-current assets have maturity dates greater than one year from the balance sheet date. F-10