Explain the difference between net income and cash flow

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Reference no: EM13899492

The following cash flows were reported by Techno Inc. in 2012 and 2011.

(In thousands)	2012	2011
Net income	$316,354	$242,329
Noncash charges (credits) to income Depreciation and amortization	68,156	62,591
Deferred taxes	15,394	22,814
Cash Provided (Used) by Operating Assets and Liabilities:	$399,904	$327,734
Receivables	(288,174)	(49,704)
Inventories	(159,419)	(145,554)
Other current assets	(1,470)	3,832
Accounts payable, accrued liabilities	73,684	41,079
Total Cash Provided by Operations	$ 24,525	$177,387
Investment activities Additions to plant and equipment	(94,176)	(93,136)
Other investment activities	14,408	(34,771)
Net investment activities	($ 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 borrowings	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 balance	78,114	291,311
Ending cash balance	$ 188,224	$ 78,114

(a) Explain the difference between net income and cash flow from operating activities for Techno in 2012.

(b) Analyze Techno Inc.'s cash flows for 2012 and 2011.

Reference no: EM13899492

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