The comparative cash flow statements from Sears and Wal-Mart are presented above. Amounts presented are in millions. Review both statements considering what you've learned in this chapter about the cash flow statement.

Answer the following questions:

When analyzing a company's cash flow statement, which section of the statement (operating, investing or financing) do you believe is the best predictor of a company's future profitability? Why?

Which company do you believe is healthier based on the cash flow statements presented? Provide at least two specific examples from the statements.

Sears Holding Corporation Statements of Cash Flows (in millions) Year Ended Jan 30, 2016 Jan 31,2015 Feb 1, 2014 Operating activities: Net income (loss) Adjustments to convert to cash basis (1,128) (1,039) (2,167) (1,810) 423 (1,387) 7 (1,109) Net cash from operations Investing activities Sales of property and investments Purchases of PP&E Other investing activities 424 (270) 173 327 2,730 (211) 995 (329) Net cash used in investing 2,519 664 Financing activities: 1,025 (80) 994 (83) 238 (14) (233) 902 (38) 419 609 1,028 Proceeds from issuance of debt Repayments of debt Other increases (decreases) in debt Dividends paid for Sears Canada Other financing activities (1,405) 1,091 (50) (27) 484 285 (364) Net cash provided(used) by financi Effect of exchange rates Net change in cash Cash, beginning of year Cash, end of year (12) 250 238 (778) 1,028 250