Alphabet Inc. is a multinational conglomerate known for its subsidiary Google LLC. Alphabet is preparing its statement of cash flows for the year ended December 31, 2023. The company provides the following information:

• Net income: $5 billion
• Depreciation expense: $2 billion
• Increase in accounts receivable: $1 billion
• Increase in inventory: $500 million
• Decrease in accounts payable: $700 million
• Purchase of equipment: $3 billion
• Sale of investments: $2.5 billion
• Payment of dividends: $1.2 billion

Requirements:

• Prepare the operating activities section of the statement of cash flows for Alphabet Inc. using the indirect method.
• Discuss the implications of the cash flow statement on Alphabet Inc.'s financial position and liquidity.