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What method of cash flow is being used in the example provided? Direct or indirect and why?

Exhibit 1 Alpha Corporation, Consolidated Statements of Cash Flows ($ millions) Year Ended June 30, 1990 1991 1989 $(377.9) 168.4 41.4 (16.6) 135.5 $(623.5) 220.1 58.2 (119.0) 384.1 $(320.6) 263.4 39.1 125.3 Operating Activities Loss from continuing operations Depreciation Amortization of capitalized software Gain from sale of investments and other assets Restructuring and other unusual items, net Changes in other accounts affecting operations Accounts receivable Inventory Other current assets Accounts payable and other current liabilities Other Net cash provided by continuing operations Net cash provided by (used in) discontinued operations Net cash provided by operating activities 160.8 80.2 17.0 (91.3) 2.8 120.3 4.9 125.2 73.4 100.9 (1.2) (21.3) 14.1 85.8 3.5 89.3 (45.2) (3.0) (13.0) 41.0 (10.5) 76.5 (29.7) 46.8 (303.6) 94.1 Investing Activities Investment in depreciable assets Proceeds from disposal of depreciable and other assets Proceeds from the sale of discontinued operations Investment in capitalized software Other Net cash provided by (used in) investing activities (129.7) 157.0 25.3 (27.8) (6.0) 18.8 (174.4) 242.0 407.3 (43.1) (13.0) 418.8 (59.5) 14.2 (254.8) (2.6) 44.4 (126.5) 5.0 (.3) Financing Activities (Decrease) increase in short-term borrowings Proceeds from long-term debt Payments of long-term debt Proceeds from sale of Class B common stock Purchase of treasury stock Dividends paid Net cash provided by (used in) financing activities Effect of changes in foreign exchange rates Increase (decrease in cash equivalents Cash and equivalents at beginning of year Cash and equivalents at end of year (222.6) 167.7 (544.8) 8.7 (.6) (7.2) (598.8) 1.1 (89.6) 258.7 $169.1 139.8 305.0 (91.7) 17.5 (18.8) (26.0) 325.8 (3.9) 113.9 144.8 $258.7 (80.0) .1 64.1 169.1 $233.2

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