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Billabong net income and SCF

See attached annual reports containing financial statements for the year 2006 pertaining to:

Billabong International Limited (
a. The Balance Sheet
b. The Income Statement
c. The Statement of Cash Flows

Based on the general organization of Billabong, I need an opinion on which of the above statements is more useful for the company: Net income or Cash from Operating Activities.

Also, please make a prediction about the company based on the additional information found in the annual report from the attached statements.


Solution Preview

Billabong is in the business of wholesaling and retailing surf, skate, and snow apparel and accessories with fairly streamlined operations. Looking at the statement of cash flows, Billabong realized a considerable outflow of cash totaling $145,179,000 in their investing segment (primarily because of the purchase of a subsidiary and the acquirement of plant, property, and equipment). These are not outside investing activities. In other words, the company is only attempting to ...

Solution Summary

The solution details which of Billabing's financials is more useful-net income or cash from operating activities and why. Also, the solution makes a prediction regarding the future performance of the firm.