At a minimum your analysis should have a section for each year and a conclusion. In each year (Year 7, 8, 9, 10, and 11) you need to discuss: - Sales each year and year-over-year trends - Net Income each year and year-over-year trends - Cash Flow from Operations each year - Investing Activity each year - Financing Activity each year - Net income and cash flow from operations and among cash flows from operating, investing, and financing activities for the firm over the five-year period.

***** - Your Conclusion Section should answer: What were the signals of Montgomery Wards difficulties that might have led to its filing for bankruptcy in 2012?

Example:

Year 7

• During Year 7, sales grew slowly.
• Net income was positive.
• Cash flow from operations exceeded net income because of the addback for depreciation.
• Cash flow from operations was reduced, however, because Montgomery Ward repaid suppliers and other providers of goods and services.
• Cash flow from operations was just sufficient to cover capital expenditures.
• The firm sold marketable securities to obtain cash. It apparently used this cash plus cash in its bank account to repay long-term borrowing.
• Several aspects of the pattern of cash flows from Year 7 are typical of a firm in the late maturity stage of its life cycle: slow sales growth, no change in short-term debt, and repayment of long-term debt.

Year 11 Year 10 Year 9 Year 8 Year 7 $101 $100 $ 109 109 9? $(237] 122 13 (197) (32) 24 32 $ (9) 115 8 (119) {54 (112) (32) B5 (6) (29) (38) (229) 225 (38) (39) (204) (58) 14 27 (222) (55) $(356) 291 (45) $ 153 (17) (6) $ 155 5182) 129 $(122) (14) $(184) (4) $(142) (27) $146) 137 $ (75) 20 93) (148) 27 OPERATIONS Net income Depreciation Other addbacks Other subtractions (Increase) Decrease in accounts receivable (Increase) Decrease in inventories (Increase) Decrease in prepayments Increase (Decrease) in accounts payable Increase (Decrease) in other current liabilities Cash Flow from Operations INVESTING Fixed assets acquired Change in marketable securities Other investing transactions Cash Flow from Investing FINANCING Increase in short-term borrowing Increase in long-term borrowing Issue of capital stock Decrease in short-term borrowing Decrease in long-term borrowing Acquisition of capital stock Dividends Other Cash Flow from Financing Change in Cash Cash-Beginning of year Cash-End of Year Change in sales from previous year (113) * | 8 *[ *| | | | | |?] | *E 3 ] \! | | ] [ |el E ', lel | E @ la[E [8] $(109) $(301) $(163) $ 588 $ 16 205 193 $ 144 1683 (17) (20) (275) (9) (18) (111) (98) (403) (97) (19) 583 51 $499 $ (5) 37 $ (65) s{516) $(361] 442 $ 81 $ 4 33 $ 37 (0,5)% 38 $ 32 $ 33 +17,29% 31 $ 98 +3.7% (10.0)% +2-0%