Question
Pfizer Inc. Pfizer Inc. is assessing its operating cash flow for the year to evaluate its liquidity position and ability to meet short-term obligations. The
Pfizer Inc.
Pfizer Inc. is assessing its operating cash flow for the year to evaluate its liquidity position and ability to meet short-term obligations. The company's net income for the period stands at $2,500,000. Additionally, Pfizer reports depreciation expenses of $500,000 and an increase in accounts receivable of $200,000. The company also records a decrease in inventory of $300,000 and an increase in accounts payable of $150,000.
Compute Pfizer's operating cash flow using the indirect method, and analyze the key components driving the change in cash flow from operations.
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