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I don't get why they include depreciation in the calculation. Depreciation should not have effect...

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Accounting

I don't get why they include depreciation in the calculation. Depreciation should not have effect on cash flow?

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13. From the following information, calculate the cash flow from operating activities as per IAS 7: 110,000 Operating Profit Depreciation 25,000 Increase in accounts receivable 35,000 9,000 Increase in accounts payable Decrease in inventory Tax paid 30,000 15,000 A. 59,000 net cash inflow B. 124,000 net cash inflow C. 194,000 net cash inflow D. 99,000 net cash inflow = 110,000 + Depreciation 25,000 - Increase in accounts receivable 35,000 + Increase in accounts payable 9,000 + Decrease in inventory 30,000 - Tax Paid 15,000

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