Question

explain the diffrence between the company's net cash flow from operating activities and the net income reported for 2014.

Data Review View Help Search CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) A CONSOLIDATEDSTAIEMICINTS Or CAST 1 FLAMC nCnAs E 2 In Millions, unless otherwise specified 12 Months Ended Sep. 27, 2014 Sep. 28, 2013 Sep. 29, 2012 Cash and cash equivalents, beginning of 3 the year $14,259 $10,746 4 Operating activities: 5 Net income $9,815 1 39,510 37,037 41,733 Adjustments to reconcile net income to 6 cash generated by operating activities: 7 Depreciation and amortization 8 Share-based compensation expense 9 Deferred income tax expense 10 Changes in operating assets and liabilities: 11 Accounts receivable, net 12 Inventories 13 Vendor non-trade receivables 14 Other current and non-current assets 15 Accounts payable 16 Deferred revenue 17 Other current and non-current liabilities 18 Cash generated by operating activities 19 Investing activities: 20 Purchases of marketable securities 7,946 2,863 6,757 2,253 1,141 3,277 1,740 4,405 2,347 2,172 5,551 4,232 -973 -15 -76 -1,414 223 -2,220 3,162 4,467 2,824 2,552 1,080 2,340 1,459 4,521 167 5,938 1,460 6,010 59,713 50,856 53,666 -151,232 -148,489 -217,128 rities of marketable Summary of Significant Account

Answer 1

Net income refers to the difference between total revenue and total expenses of the company in a particular period.

Cash flow from operating activity is the total cash generated by the company in a particular period from its regular business activities. It is computed by adding non cash expenses and deduct changes in current assets and liability from net income of the company.

The difference between net income and operating cash flow is non cash expenses and change in current assets. Net income doesn't considered current assets and liability of the company as well it deduct non-cash expenses. On the other hand, Operating cash flow only consider only cash transaction of the company. Therefore, the non-cash expenses that are deducted in the net income is added back to the net income in the cash flow to determine the net cash flow from operating activity as well as record the changes in the current assets and liability of the company.