What information can be gathered from Barnes & Noble’s statement of cash flows?

Barnes & Noble is a retailer of content, digital media, and educational products.  It has nearly 700 bookstores in 50 states and also has a large e-commerce presence on the Web.  In the past few years, there has been speculation that Barnes & Noble will not survive in the long-term. Among other news stories, the Wall Street Journal reported on November 26, 2013, that B & N sales are eroding for both print books and e-books. U.S. News & World Report reported that sales of the Barnes & Noble Nook plunged.

Let’s see what the statement of cash flows can tell us about Barnes & Noble’s operations.

The 2012 Annual Report for Barnes & Noble can be found here.  See pages 32 – 33 of the annual report for the Statement of Cash Flows.

Using the 2012 Fiscal Statement of Cash Flows for Barnes & Noble, answer the questions to follow.

Questions:

1)      Did Barnes & Noble use the indirect method or the direct method to prepare its statement of cash flows? How do you know?

2)      For fiscal 2012, did Barnes & Noble’s operating activities provide cash or use cash?  How much?

3)      For fiscal 2012, did Barnes & Noble’s  investing activities provide cash or use cash?  How much?  What investing activities used cash?  What investing activities provided cash?

4)      For fiscal 2012, did Barnes & Noble’s financing activities provide cash or use cash?  How much?  What financing activities used cash?  What financing activities provided cash?

5)      What conclusion(s) can you draw solely from Barnes & Noble’s statement of cash flows for fiscal 2012?

Instructor Resources

These resources are provided to give the instructor flexibility for use of Accounting in the Headlines articles in the classroom. The blog posting itself can be assigned via a link to this site OR by distributing the student handout below.  Alternatively, the PowerPoint file below contains a bullet point overview of the article and the discussion questions.  The YouTube video link below is a narration of the blog post article (no discussion questions are included in the YouTube video; those can be assigned separately.)

• Student handout (pdf) (contains entire blog posting + discussion questions)
• PowerPoint file (brief article overview + discussion questions)
• YouTube video (narrated article in shareable YouTube link)

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