Forzanis cash position is significantly lower at the end of fiscal 2009 than the year before. Explain
Question:
Forzani’s cash position is significantly lower at the end of fiscal 2009 than the year before. Explain the reason for the decrease. Is this something you are concerned about? Explain. Why is Forzani’s cash from operations so much greater than its net income?
The Forzani Group Ltd. is Canada’s largest sporting goods retailer, offering brand-name and private-brand products. It operates stores across the country, under the following corporate and franchise banners: Sport Chek, Coast Mountain Sports, Sport Mart, National Sports, Athletes World, Sports Experts, Tech Shop, Nevada Bob’s Golf, Hockey Experts, and The Fitness Source.
The company also retails online at www.sportmart.ca and offers a sporting goods information site, www.sportchek.ca. At the end of fiscal 2009, Forzani Group operated 337 corporate stores and was franchisor/licensor of 227 stores.’
Forzani’s consolidated balance sheets, statements of operations, comprehensive earnings, and cash flows, and extracts from the notes to the financial statements are provided in Exhibit 12.3.
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