Cash Flow from Operating i Activities: The Indirect Method Net Income $6,000 Add back non-cash expenses: Depr. exp. 600 Add (subtract) changes in operating working capital items: + Decrease in A/R 200 - Increase in inv. (500) + Decrease in prep. Exp. 100 + Increase in A/P 400 + Increase in accrued liabilities 700 Cash flow from operating activities $7.500