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    Urban Outfitters: Statement of Cash Flows

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    Refer to the financial statements of Urban Outfitters given in Appendix C at the end of this book (or at http://www.sec.gov/Archives/edgar/data/912615/000119312512146029/d276682d10k.htm).

    1. Does Urban Outfitters use the direct or indirect method to report cash flows from operating activities?
    Answer: Indirect Method

    2. What amount of tax payments did the company make during the most recent reporting year?
    (Hint: The statement of cash flows may be helpful to answer this question.)

    Answer: Tax payments of $ 120,847 thousand were made (located near the bottom of the Statement of Cash Flows)

    3. Explain why the "share-based compensation" and "depreciation and amortization' items were added in the reconciliation of net income to net cash provided by operating activities.

    Answer: "Share-based compensation" and "depreciation and amortization" is added back to net income to determine cash flows from operations.

    4. Has the company paid cash dividends during the last three years? How do you know?

    Answer: No. The company has not paid cash dividends during the last several years since its initial public offering. Any dividends paid would be financing cash flow.

    5. What was free cash flow for the year ended January 31, 2012? (Dollars in thousands).


    Cash Flows from: Operating Activities: $ 282,702
    Less: Dividends: 0
    Less: Capital Expenditures: 190,010
    Free Cash Flow: $ 92,692

    Please provide explanations for these questions.

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    Solution Preview

    See the attached file.


    1. In answering, I referred to the Annual report of Urban Outfitters for the year ended January 31, 2012
    It can be accessed at http://www.sec.gov/Archives/edgar/data/912615/000119312512146029/d276682d10k.htm. Refer to page ...

    Solution Summary

    This solution provides an analysis of Urban Outfitters' statement of cash flows.