Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 64

Reporting and Interpreting Cash Flows from Operating Activities from an Analyst's Perspective (Direct Method)
Refer back to the information given for E12-10, plus the following summarized income statement for Pizza International, Inc. (in millions):

Required:
1. Based on this information, compute cash flow from operating activities using the direct method. Assume that Prepaid Expenses and Accrued Liabilities relate to other expenses.
2. What were the major reasons that Pizza International was able to report positive cash flow from operations despite having a net loss
3. Of the potential causes of differences between cash flow from operations and net income, which are the most important to financial analysts