Refer to the following summarized income statement and additional selected information for Sizzler, Inc.:

Required:
1. Based on this information, compute cash flow from operating activities using the direct method. Assume that prepaid expenses and accrued liabilities relate to other expense.
2. What were the major reasons that Sizzler was able to report a net loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and net income important to financialanalysts?

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Income statement Other information: Revenues Cost of sales Gross margin Salary expense Depreciation and amortion 33,305 Decrease in Other expense Net loss before tax Income tax expense Net loss $ 170 643 664 2,282 719 1,861 $136,500 45,500 91.000 56,835 Increase in receivables Decrease in inventories Increase in prepaid expenses Decrease in accounts payable Increase in income taxes payable 7.781 (6,921) 2,561 $ (9482)