Agree or Disagree, and Why?

The cash flow statement is an interesting report that I understand through the years I have been doing business school, but I really never knew how to analyze it compared to other financial factors. The core purposes of the statement to see if a company can handle to their monthly bills, pay dividends, and avoid bankruptcy. Cash flow is broken up into operating activities, investment activities, and financing activities. I was interested to see all the different activities and what fell into them. The two main methods of preparing the statements are direct and indirect. The direct is a cash statement in the form of income statements, and the indirect reconciles cash from operations. The interesting thing about cash flow that I have a hard time with is the inputs of depreciation, and I really do not understand how no-cash expenses work into cash lows. The depreciation inputs really gave me trouble during the quiz problems, and I was not quite able to get them right. (Ch 13, Mark Imbrigiotta)