Analyzing the Statement of Cash Flows, homework help

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Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009.

(in thousands)20092008
Net income$ 316,354$ 242,329
Noncash charges (credits) to income
Depreciation and amortization 68,156 62,591
Deferred taxes15,39422,814
$ 399,904$ 327,734
Cash Provided (Used) by Operating Assets and Liabilities:
Receivables (288,174) (49,704)
Inventories (159,419) (145,554)
Other current assets (1,470) 3,832
Accounts payable, accrued liabilities73,68441,079
Total Cash Provided by Operations$ 24,525$ 177,387
Investment activities
Additions to plant and equipment (94,1760) (93,136)
Other investment activities14,408(34,771)
Net investment activities ($ 79,768)($ 127,907)
Financing activities
Purchases of treasury stock (45,854) (39,267)
Dividends paid (49,290) (22,523)
Net changes in short-term borrowing 125,248 45,067
Additions to long-term borrowings 135,249 4,610
Repayments of long-term borrowings (250,564)
Net financing activities$ 165,353($ 262,677)
Increase (decrease) in cash$ 110,110($ 213,197)
Beginning cash balance78,114291,311
Ending cash balance$ 188,224$78,114

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Explanation & Answer

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Analyzing the Statement of Cash Flows
The Table shown in the Appendix shows the net income and cash flow from operating
activities for Techno in 2009 and 2008 respectively. The company’s total profit is it’s net
income. On the other hand, cash flow is based on the actual receipts and payment of cash.
(Investopedia, N.p.).
The net income in 2009 was 30.55% higher compared to 2008 and this lead to
conclude that Techno in 2009 performed better than 2008.The cash flow from...


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