Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Deckers Outdoor Corporation designs and markets footwear under the brand names Teva, UGG, and others. Assume that two recent years produced a combination of declining
Deckers Outdoor Corporation designs and markets footwear under the brand names Teva, UGG, and others. Assume that two recent years produced a combination of declining sales revenue and net income, culminating in a net income of only $5,710 (all numbers in thousands). Yet Deckers was able to report positive cash flows from operations in the current year of $198,677. Contributing to that positive cash flow was the change in accounts receivable. The current and prior year balance sheets reported the following: (dollars in thousands) Current Year Previous Year $ 158,643 $ 160,154 Trade accounts receivable, net of allowances Required: 1. On the current year's cash flow statement (indirect method), how would the change in accounts receivable affect cash flow from operations? 2-a. How does declining sales revenue often lead to declining accounts receivable? 2-b. How does declining sales revenue often lead to cash collections from customers being higher than sales revenue? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 2B On the current year's cash flow statement (indirect method), how would the change in accounts receivable affect cash flow from operations? (Enter your answers in thousands not in dollars.) thousand Under the indirect method, the would be in the accounts receivable balance of net income to derive cash flow from operations.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started