Gap Inc. operates chains of retail clothing stores under the names of Gap, Banana Republic, and Old Navy. Exhibit 3.19 presents the statement of cash flows for Gap for Year 0 to Year 4. Discuss the relations between 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. Specu-late on reasons for the more significant increases and decreases.

\begin{tabular}{|c|c|c|c|c|c|} \hline \multicolumn{6}{|c|}{ Exhibit 3.19} \\ \hline \multicolumn{6}{|c|}{GapInc.StatementofCashFlows(amountsinmillions)(Problem3.21)} \\ \hline & Year 4 & Year 3 & Year 2 & Year 1 & Year 0 \\ \hline \multicolumn{6}{|l|}{ OPERATIONS } \\ \hline Net income (loss) & $1,150 & $1,031 & $478 & $(8) & \$ 877 \\ \hline Depreciation & 620 & 675 & 706 & 811 & 590 \\ \hline Other additions and subtractions & (28) & 180 & 166 & 30 & 92 \\ \hline (Increase) Decrease in inventories & (90) & 385 & (258) & 213 & (455) \\ \hline (Increase) Decrease in prepayments & (18) & 5 & 33 & (13) & (61) \\ \hline Increase (Decrease) in accounts payable & 42 & (10) & (47) & 42 & 250 \\ \hline Increase (Decrease) in other current liabilities & (56) & (106) & 165 & 243 & (3) \\ \hline Cash Flow from Operations & $1,620 & $2,160 & $1,243 & $1,318 & $1,290 \\ \hline \multicolumn{6}{|l|}{ INVESTING } \\ \hline Fixed assets acquired & $(442) & $(261) & $(308) & $(940) & $(1,859) \\ \hline Changes in marketable securities & 259 & (2,063) & (313) & - & - \\ \hline Other investing transactions & 343 & 6 & (8) & (11) & (16) \\ \hline Cash Flow from Investing & $160 & $(2,318) & $(629) & $(951) & $(1,875) \\ \hline \end{tabular} (Continued)