Coolbrands International Inc. manufactures and distributes ice cream, sorbet, frozen yogurt, and other frozen dairy-based snacks. The following information is available from the company's annual report for a recent year (in thousands):

Required:
1. Based on this information, compute the cash flows from operating activities by using the indirect method.
2. What were the major reasons that caused Coolbrands to report a loss but positive cash flow from operations? Why are the reasons for the difference between cash flow from operations and profit important to financial analysts?

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2005 Loss $(74,070) Depreciation and amortization 60,567 Decrease in receivables 13,815 Decrease in inventories 4,500 Increase in prepayments 2,207 Increase in trade payables 5,842 Increase in accrued liabilities 8,744 Increase in income taxes payable 4,935 Reduction of long-term borrowings 4,007 Additions to equipment 12,409