Question

Please use this information to solve this problem

All in Million USD	2019	2018
Cash and cash equivalents	$ 8,934	$ 11,708
Short-term Investments	37,614	58,784
Accounts receivable	10,503	10,002
Inventories	1,846	1,616
Prepaid expenses	2,940	1,593
Total current assets	$ 61,837	$ 83,703
Property and equipment	44,395	43,576
Intangible assets	2,552	2,539
TOTAL ASSETS	$ 108,784	$ 129,818
Current liabilities:
Short-term debt	9,651	12,384
Accruals	11,493	2,733
Account payables	2,986	2,895
Deferred revenue	19,685	18,494
Total current liabilities	43,815	36,506
Long-term debt	21,765	27,175
Total liabilities	65,580	63,681
Common stock & additional paid-in	42,820	42,820
Retained earnings	384	23,317
Total equity	43,204	66,137
TOTAL LIABILITIES AND EQUITY	108,784	129,818

Income Statement	2019
Revenue	$ 49,330
Total cost of sales	18,724
GROSS MARGIN	$ 30,606
Research & development	6,332
Sales and marketing	9,242
General admin expense	2,723
OPERATING INCOME	$ 12,309
Interest income	1,508
Interest expense	-778
Income before income tax	$ 13,039
Income taxes	2,607.8
NET INCOME	10,431.20

If the depreciation expense during 2019 is $550 Million, calculate the Change in Cash from Operating Activities for this firm during 2019 based on above information. Also explain what this Change in Cash from Operating Activities for this firm during 2019 mean to investors?

Answer 1

Cash flow from operating activities represents the liqudity of the company. Here company has positive cash flow from operating activities since it is a good sign. Because company has adequate net working capital to meet the day to day operations.