Kmart Equity, Cash Flow, Notes

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Equity, Cash Flow, and Notes Analysis Paper


Accounting for Managerial Decision Making

Cynthia Law
Scott Law
Sunny Lee
Samuel Ogunwobi
Clara Reid

Professor James Neuner

January 19, 2004
Table of Contents

Table of Contents 2
Introduction 3
Consolidated Statements of Shareholders ' Equity 3
Consolidated Statements of Cash Flows 4
Goals of the Organization 5
Important notes to the financial statements 6
Management 's Discussion and Analysis of Operations 9
Conclusion 10
Table 1 11
Table 2 12 Table 3 ……………………………………………………………………………………13
References 14 Introduction

Kmart remains one of the largest retail stores in America that must be recognized with strong financial statement and balance sheet.
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In Fiscal Year 2002, this was listed as negative cash flows of $168 million. The periods ending on April 30, 2003 and January 28, 2004 saw positive inventory amounts of $480 million and $1193 million, respectively. Although this is merchandise that remains on the shelf, this accounted for a significant amount of the cash flows from operative activities. Two other positive cash flow items were proceeds from property and equipment sales and proceeds from the issuance of stock. These two items accounted for $322 million in positive cash flow and greatly assisted the entity in establishing itself as a solvent organization.
Goals of the Organization

In the letter to the shareholders, Kmart Chairman Edward Lampert and President and CEO of Kmart Julian Day established other goals of the organization: "to focus our initiatives, merchandise assortment and associate goals on the four key areas of stores, markets, customers and profitability" ( After Mr. Lambert took control after Chapter 11 proceedings, Kmart slashed inventory, squelched capital spending, reorganized the overall organization, and sold Kmart 's best locations for the cash to maximize profitability ( Stigmas associated with Chapter 11 can be very difficult for a company to overcome. Investors have doubts about the ability of the organization to turn around bad fortunes, customers wonder if the service issues that drove them away

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