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WOU TUI YUU. 3) The Cashflow Statement. MILANO An intern in your office brings you the Cashflow Statement of PRADA Group (also included with this exam). PRADA "I don't understand this Operating Activities part of the Cashflow Statement," she says. "Here's Depreciation and amortization of 219.882 being added back to the firm's 302,538 in Income, so we can get to the firm's Cash flows provided by operating activities of 434,870. What's going on here?" "Oh, that's simple," you say. "On every Cashflow Statement the first thing you always see is Net Income, then an add-back of Depreciation and Amortization." "Now I'm even more confused," says the intern. "Always? Why is that?" | Explain to your intern why Depreciation and Amortization are always added to Net Income as the first step in a Cashflow from Operations section. The Cashflow Statement part 2. Why is Cashflow always different from Net Income? In other words, what is Net Income, it is Cashflow (which it isn't!) ...? This is one of the most fundamental questions anybody can ask you about "accounting numbers." Why is there a Cashflow Statement AND an Income Slalom You can really answer any one of these ??? in answering this Conceptual Questo they're all different ways of asking the same thing Net Income is not cashflow. What causes to be different? If you wish, give an example or two, and explain why it causes cashion Income to be different

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