USA has set this standard and the companies submit their annual and quarterly reports under the US accounting standard namely US GAAP. US GAAP is considered important because its sets the basic principal and standards under which the accounting department of the company can operate. It also set the standards and a regulation which helps the company keep its reporting standards simple.
At NEXT, cash is at high sustainable levels, but it will have tendency to erode in years after the product is launched. The main reason for this is the idle cash which is not generating returns and excess capital investments in 2013-2014. This is based on the assumption that company will be in expansion mode in those years. Cash flow levels are at healthy and sustainable positions and the wealth will be created if company can launch further products in the next two years. The numbers are based on some critical assumptions and are subject to change, given the way market conceive the product made by NEXT.
The company hopes to drive comparable-store sales by focusing on local market share positions as it continues the expansion of its supercenter format. Operating about 985 million square feet globally, the company historically grew square footage at least 8% annually. In the third quarter of FY 07, the company outlined a plan to refocus new store expansion on maximizing returns on invested capital rather than trying to maintain an 8% square footage growth target. As a result, the company expected U.K square footage growth to moderate. In FY 12, the company plans to slow square footage growth in the domestic market while accelerating growth internationally. We believe this new focus will result in improved performance at existing locations as the company maximizes existing store volumes before adding a new nearby warehouse. Due to the resulting decrease in capital expenditures, we believe the company will use excess cash to accelerate share repurchases, increase dividends and pursue international acquisitions.