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Equity, Cash Flow And Notes Analysis

2534 words - 11 pages

Chico's FAS, INCAnalysis of Equity, Cash Flows, Notes to Financial Information and Other Financial information Report to Scott Edmonds President and CEOChico's FAS, Inc. (NYSE: CHS) is a retailer of high-end women's apparel designs, sources and retails unique brands of trendy women's sophisticated and casual fashion Chico's started in 1983, after the acquisition of White House / Black Market in 2003 they have over 571 stores in 46 states, Washington DC, Puerto Rico and the Virgin Islands. The company competes with giants such as Federated Department stores, and similar sized chains such as Ann Taylor and Talbots. We examined the company's 2003 10K filing for their fiscal year ending January ...view middle of the document...

87%Acquisition ImpactReceivables Net -1,953 -143 -1,810 1265.73%Inventories -4,658 -16,002 11,344 -70.89%Prepaid expenses -1,281 -1,691 410 -24.25%Accounts payable -3,175 9,000 -12,175 -135.28%Accrued liabilities 11,035 11,046 -11 -0.10%Total adjustments 45,150 42,048 3,102 7.38%Net cash from operating 145,380 108,807 36,573 33.61%CASH FLOWS FROM INVESTING ACTIVITIES:Purchases of marketable securities -166,855 -134,918 -31,937 23.67%Proceeds from sale of marketable securities 153,447 84,235 69,212 82.17%Acquisition, net of cash acquired -87,636 0 -87,636 NAPurchases of property and equipment -52,300 -64,742 12,442 -19.22%Net cash used in investing activities -153,344 -115,425 -37,919 32.85%Cash Flows From Financing ActivitiesProceeds from issuance of common stock 15,231 7,247 7,984 110.17%Payments on capital leases -344 0 -344 NAPrincipal payments on debt 0 -5,155 5,155 -100.00%Deferred finance costs 0 -98 98 -100.00%Net cash provided by financing activities 14,887 1,994 12,893 646.59%Net increase (decrease) in cash and cash equivalents 6,923 -4,624 11,547 -249.72%CASH AND CASH EQUIVALENTS, Beginning of period 8,753 13,377 -4,624 -34.57%CASH AND CASH EQUIVALENTS, End of period 15,676 8,753 6,923 79.09%Cash Flows From Operating ActivitiesFor the prior year Net come was $66.759MM and the current year was $100.230 MM. this was an increase of $33.471MM or 50%. This increase primarily the result of the White House / Black Market acquisition in September of 2003, and to a lesser degree, an increase of same store sales during the fiscal year 2003.Adjustments to reconcile net income to net cashAdjustments to reconcile net income to net cash provided by operating activities totaled $42MM in 2003 and $45MM in 2004. This was an increase of $3MM or 7%. Depreciation is the first line item and is divided into Depreciation and amortization of cost of goods sold and then Depreciation and amortization other. This is the most significant adjustment in terms of dollars and as a percentage of the adjustment. It is the adding back of the non-cash expense of depreciation for capital assets. This would be the result of additional capital assets from acquisitions and required for store growth.Tax benefit of options exercised adjustment decreased ($7.4MM) or (33%). This could have been due to fewer options being exercised than in the prior year.The next two subsections are (Increase) decrease in assets net of effects of acquisition and (Decrease) increase in liabilities net of effects of acquisition. Inventories adjustment increased from ($16MM) to ($4.6MM) an increase of $11.3MM, this means that at the end of the period the inventory sitting as an unsold asset was much smaller than the year before.Accounts payable adjustment decreased by $12MM . The company used cash to reduce the total amount of payables.Total adjustments increased $3.1MM making the total net cash from operations $145.3MM.Cash Flows From Investing ActivitiesIn this section, the company identifies the...

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