PaperlinX Limited, an Australian paper manufacturer using IFRS, reported the following in the operating activities section of its statement of cash flows:

Additional information:

Instructions
(a) Is PaperlinX using the direct or indirect method when preparing its operating activities? Explain why you named the method you did.
(b) Does IFRS require or recommend the use of one method over another when preparing the operating activities section of a statement of cash flows?
(c) Identify any possible classification differences that an analyst should be aware of before comparing PaperlinX's statement of cash flows with that of another company, whether in Australia or any other country.
(d) Calculate PaperlinX's cash current debt coverage, cash total debt coverage, and free cash flow for 2010 and 2009. Comment on any changes in the company's liquidity and solvency based on these measures.

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PAPERLINX LIMITED Statement of Cash Flows (partial) Year Ended June 30 (in AUD millions) 2010 2009 Operating activities Receipts from customers Payments to suppliers and employees Dividends received Interest received Interest paid Income tax paid S5,226.7 (5,169.9) 0.1 2.8 (36.4) (0.2) 23.1 $7,315.0 (7,214.1) 0.8 3.6 (98.3) ー(13,0) Net cash provided (used) by operating activities 2010 $ 11.5 2009 $ 26.9 Net capital expenditures Dividends paid Average current liabilities Average total liabilities 10.3 1,519.4 2,064.8 1,261.6 1,541.1