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.

Wal-Mart Stores, Inc. Statements of Cash Flows in millions Fiscal Years Ended Jan 31, 2016 Jan 31, 2015 Jan 31, 2014 Operating activities: Net income (loss) Adjustments to convert to cash basis 15,080 12,309 27,389 17,099 11,465 28,564 16,695 6,562 23,257 Net cash from operations Investing activities (13,115) 727 Purchases of PP&E Proceeds from disposal of PP&E Proceeds from disposal of some ops Other investing activities (11,477) 635 246 (79) (10,675) (12,174) 570 671 (192) (11,125) (138) (12,526) Net cash used in investing Financing activities: Net change in borrowings Proceeds from issuance of debt Repayments of long-term debt Dividends paid Purchase of company stock Other financing activities 1,235 39 (4,432) (6,294) (4,112) (2,558) Net cash provided(used) by financi(16,122) (1,022) (6,288) 5,174 (3,904) (6,185) (1,015) (2,853) (15,071) (514) 1,854 7,281 9,135 911 7,072 (4,968) (6,139) (6,683) (982) (10,789) (442) (500) 7,781 7,281 Effect of exchange rates Net change in cash Cash, beginning of vear Cash, end of year (430) 9,135 8,705