AutoZone uses the indirect method to show their cash flows. In addition to showing net income and non-cash expenses (GLAD acronym) in operating activities, it shows changes in current balance sheet accounts.
Investing activities include capital expenditures along with proceeds and purchases of marketable securities. 2016 marketable securities increased over 160% from 2015 and 2014 ($130 million compared to $49.7 million). In 2015, AutoZone acquired Interamerican Motor Corporation.
Financing activities mainly consist of repayments of debt, issuance of debt which increase in 2016 and 2015 from 2014 (400,000 to 650,000) and purchasing treasury stock.
Free Cash Flows: For free cash flows, which is cash flows from operations minus capital expenditures essential to maintaining productive capacity and dividends, it allows companies to know what amount of cash they have to work with to help further the success of their company.
AutoZone's 2016 Free cash was calculated to be $1.088 billion. 2015 was $1.044 billion, and 2014 was $903 million
References: AutoZone. (2016). Form 10-K 2016. Retrieved from SEC EDGAR website https://www.sec.gov/Archives/edgar/data/866787/000119312516745160/d253831d10k.ht m AutoZone Inc. (n.d.). Retrieved March 06, 2017, from http://www.marketwatch.com/investing/stock/azo/financials/cash-flow