Cash+Flow

On Fri, Feb 19, 2010 at 5:37 AM, Jensen, Robert  wrote:

Hi Don, I don’t have much say about this but it would seem that inventory increases financed by debt would seemingly confuse your statement without more detail. What might help the financial analysis is if the CGM statement reconciled with a more detailed analysis of cash flow provided by operations. The WT Grant Case was a classic example of where inventories and receivables growth was out of control while working capital still looked pretty good and lagged the warnings found in the operations cash flow analysis. I realize that WT Grant was a retailing case, but it nevertheless is relevant to manufacturing as well. The WT Grant case is an important case in accounting history because the WT Grant implosion was a major cause of a new accounting rule requiring companies to generate cash flow statements. Robert E. (Bob) Jensen Trinity University Accounting Professor (Emeritus) 190 Sunset Hill Road Sugar Hill, NH 03586 Tel. 603-823-8482 www.trinity.edu/rjensen