The net cash flow from operating activities of Gap Inc has increased by $831 million in comparison with the year 2006 because of higher earnings and less spending of cash on merchandise purchases. And also the increment in the accounts payable made a significant impact on the cash flow from operations. While Best Buy Inc’s operating activities reported $1762 million due to the increment in the net earnings and also change in the inventory level. The operating level of Adidas reflects the finance of working capital needs in accordance with the seasonality of the business.
So I reckon that Best buy and Gap are neck and neck in terms of operational activities of the business. Gap Inc’s investing activities are decreasing due to the purchases of short term investment and also due to the expansion in business. Gap has also incurred some capital expenditures. In the year 2007 company opened 115 new stores which has impacted the outflow on investing activities.
Best Buy Inc has incurred some capital expenditures which impacts on investing activities. Adidas’ investing activities shows an outflow, due to which 4% construction is made for expansions in its business.
In the investing activities Gap Inc has an edge over its competitors because they have better control over the cash and they use proper asset management techniques, in accordance with the business requirements. Gap Inc repurchased some of their common stock and repayment of debt and dividend payment has made an impact. But this hasn’t hit them too badly because they have treasury stock while the other competitors both Best Buy and Adidas rely heavily on debt financing so repayment of those debts is a major barrier to their financing activities.
The directors and senior management OF Gap Inc are keenly practice on the corporate governance affairs, SEC rules and regulations that is imposed on every single business, meeting the accounting and audit standards in accordance with the international laws, and compliance affairs too. The directors and management are very much proficient and well versed in handling the corporate affairs and prepare the policies in respect to the company’s norms.
Although they have set the standards for dealing with corporate governance affairs which is stated below:
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