Why are there differences between BS and Statement of Cash Flows

Hi All,

Due to the quarantine, I'm doing some modeling practice to pass the time. I came across this problem that confused me while I was comparing the Balance Sheet and Statement of Cash Flows information from for Dollar General's (DG) latest 10K:

Why are there material differences in information between the cash flow statement and the balance sheet? For instance, on the B/S the difference in inventories from FY17-FY18 is 488M but 521M on the cash flow statement for the same period.

I am seeing a similar difference with Capital Expenditures on the B/S (Change in PP&E) vs. CapEx on the CFS.

I would really appreciate it if someone with more experience than myself could explain these differences as I haven't been able to find a definitive answer online.

Also, all of my numbers have been pulled from the FY 2019 10K available here: https://investor.dollargeneral.com/websites/dollar...

Comments (11)

Mar 25, 2020

M&A activity is a common reason.

    • 3
  • Intern in IB-M&A
Mar 26, 2020

The BS numbers include Depreciation

    • 1
  • Intern in IB - Ind
Mar 26, 2020

What about things like receivables?

Mar 26, 2020

Generally speaking consider the non-cash effects - receivables have allowances for doubtful accounts. There's an initial recording of the allowance (non-cash) that'll flow through IS, CFS, then BS that impacts earnings. If company is able to collect more than allowance, there'd be other steps to unwind that amount.

Working capital accounts can be tricky because the amount of variability between reporting periods.

Mar 26, 2020

Additionally, often times a company's depreciation on the balance sheet for doesn't match up with what's reported on the CFS. Certain depreciation can be clumped in with cost of sales depending on the nature of their business. So this can create another discrepancy

    • 1
Mar 27, 2020