Table below presents the statement of cash flows for a womens clothing retailer J Jill The company started as a mail order company and has expanded into mall department stores The company as of 2012 receives approximately half of its revenues from mail order and half from retail outlets Over the time period 2010 to 2012, sales increased approximately 25 Based on the information provided, evaluate each of the statements, a) through d), concerned with the relationship between the firms net income, working capital, and cash flows from different activities Provide your answer as True or False FY 2012 FY 2011 FY 2010 Cash from operating activities Net income 8,706 7,025 18,434 Depreciation amortization 18,663 16,131 12,672 Net increase (decrease) in assets liab 6,696 26,659 10,623 Other adjustments, net 1,396 924 3,996 Net cash provided by (used in) operations 35,461 50,739 45,725 Cash from investing activities (Increase) decrease in property plant 28,784 34,265 34,734 Other cash inflow (outflow) 35,434 1,143 2,454 Net cash provided by (used in) investing 64,218 35,408 37,188 Cash from financing activities Issuances (purchases) of equity shares 3,142 870 7,800 Increase (decrease) in borrowings 1,706 1,648 1,755 Net cash provided by (used in) financing 1,436 778 6,045 Net change cash cash equivalents 27,321 14,553 14,582 Cash and cash equivalents at beg of year 59,287 44,734 30,152 Cash and cash equivalents at end of year 31,966 59,287 44,734 As the firm is expanding into retail space, additional capital expenditures are incurred, as reflected in large cash inflows from investing activities Answer True False The firms increasing depreciation expense is contradicting its expansion accompanied with increasing amount of property, plant, and equipment, and this apparent contradiction is the consequence of the noncash nature of depreciation expense Answer As sales have increased, so has its need for working capital The firm has experienced a net increase in current liabilities, as reflected in the financing cash flow section Answer To finance its expansion, the firm is relying more on debt capital than equity capital Answer

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Table below presents the statement of cash flows for a womens clothing retailer J. Jill.The company started as a mail order company and has expanded

Table below presents the statement of cash flows for a womens clothing retailer J. Jill.The company started as a mail order company and has expanded into mall department stores. The company as of 2012 receives approximately half of its revenues from mail order and half from retail outlets. Over the time period 2010 to 2012, sales increased approximately 25%. Based on the information provided, evaluate each of the statements, a) through d), concerned with the relationship between the firms net income, working capital, and cash flows from different activities. Provide your answer as True or False.

	FY 2012	FY 2011	FY 2010
Cash from operating activities
Net income	8,706	7,025	18,434
Depreciation & amortization	18,663	16,131	12,672
Net increase (decrease) in assets &liab.	6,696	26,659	10,623
Other adjustments, net	1,396	924	3,996
Net cash provided by (used in) operations	35,461	50,739	45,725

Cash from investing activities
(Increase) decrease in property & plant	-28,784	-34,265	-34,734
Other cash inflow (outflow)	-35,434	-1,143	-2,454
Net cash provided by (used in) investing	-64,218	-35,408	-37,188

Cash from financing activities
Issuances (purchases) of equity shares	3,142	870	7,800
Increase (decrease) in borrowings	-1,706	-1,648	-1,755
Net cash provided by (used in) financing	1,436	-778	6,045

Net change cash & cash equivalents	-27,321	14,553	14,582
Cash and cash equivalents at beg. of year	59,287	44,734	30,152
Cash and cash equivalents at end of year	31,966	59,287	44,734

As the firm is expanding into retail space, additional capital expenditures are incurred, as reflected in large cash inflows from investing activities.

Answer: True / False

The firms increasing depreciation expense is contradicting its expansion accompanied with increasing amount of property, plant, and equipment, and this apparent contradiction is the consequence of the noncash nature of depreciation expense.

Answer:

As sales have increased, so has its need for working capital. The firm has experienced a net increase in current liabilities, as reflected in the financing cash flow section.

Answer: