Calculating and interpreting cash flow from operations. Selected data for Nokia, a Finnish cellular phone manufacturer, appear below (amounts in millions of Euros):

X Year 8 Year 9 Year 10 Year 11 Net Income (Loss) €1,032 Depreciation Expense 465 Increase (Decrease) in:

Accounts Receivable 272 Inventories 121 Prepayments (77)

Accounts Payable 90 Other Current Liabilities 450 1,689 €2,542 €3,847 509 665 1,009 1,573 982 2,304 103 362 422 17 33

(49)

140 312 458 1,049 867 923

a. Compute the amount of cash flow from operations for each of the four years using the indirect method.

b. Discuss briefly the most important reasons why cash flow from operations differs from net income or net loss for each year.