Question

Time Warner Inc. is a leading media and entertainment company whose businesses include Turner, Home Box Office, and Warner Bros. A number of years ago, the company's annual report contained the following information (dollars in millions): Net loss $ (13,402 ) Depreciation, amortization, and impairments 34,790 Decrease in receivables 1,245 Increase in inventories 5,766 Decrease in accounts payable 445 Additions to equipment 4,377 Source: Time Warner Inc.

Required: 1. Based on this information, compute cash flow from operating activities using the indirect method. (Enter your answers in millions. List loss amounts and cash outflows as negative amounts.)

Answer 1

Net Cash flow from Operating activities $16,422

Step-by-step explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net loss - $13,402

Adjustment made:

Add: Depreciation, amortization, and impairments $34,790

Add: Decrease in accounts receivable $1,245

Less: Increase in inventory -$5,766

Less: Decrease in accounts payable -$445

Total of Adjustments $29,824

Net Cash flow from Operating activities $16,422