Praxair Incorporated was founded in 1907 as Linde-Air Products Company and was a pioneer in separating oxygen from air. It was purchased and run as a subsidiary of Union Carbide. In 1992 Praxair became an independent public company. Today the company is one of the top three largest suppliers of industrial gases worldwide. Praxair has operations in all regions of the world, with a majority of its sales occurring outside of the United States.
The following management discussion was included in Praxair's 1994 annual report:

\section*{Instructions}

(a) What method has Praxair changed from?

(b) What will the newly prepared cash flow statement show that the former one did not?

(c) Will the cash flows from investing and financing appear any differently under the new method of preparation than they did under the old method?

Transcribed Image Text:

PRAXAIR PRAXAIR Management Discussion and Analysis Liquidity, Capital Resources, and Other Financial Data: In 1994 Praxair changed its presentation of the Statement of Cash Flows to the direct method to report major classes of cash receipts and payments from operations. Praxair believes the direct method more clearly presents its operating cash flows. Prior years' cash flow information has been reclassified to conform to the current year presentation.