Please assist with Question #2

Reading and Interpreting Walgreens Boots Alliance's Statement of Cash Flows Refer to Walgreens's statement of cash flow and answer the following questions for the most recent year. Required: 1. Which method, direct or indirect, does Walgreens Boots Alliance use in preparing the Operating Activities section of its statement of cash flows? indirect Explain how you know which method is being used. The indirect method begins with net earnings, and adjustments are made to reconcile net earnings to net cash provided by operating activities. 2. By what amount does net cash provided by operating activities differ from net earnings? Enter your answer in millions. million What is the largest adjustment to reconcile the two numbers? Explain the nature of this adjustment. Why is it added? The largest adjustment to reconcile the two numbers is for depreciation and amortization . The amount is added back to net earnings because it is a non-cash expense. 3. What is the largest source of cash in the Investing Activities section of the statement? Proceeds from sale leaseback transactions What is the largest use in this section? Alliance Boots acquisition What is the next largest use of cash in this section? Additions to property, plant and equipment 4. What is the largest source of cash in the Financing Activities section of the statement? Proceeds from the issuance of long-term debt What is the largest use of cash in this section? Payments of long-term debt 2015 2013 $ 2,548 1,283 (120) 114 202 104 (496) 113 (449) 321 18 182 424 103 68 4,301 103 Walgreens Boots Alliance, Inc. and Subsidiaries Consolidated Statements of Cash Flows For the years ended August 31, 2015, 2014 and 2013 (In millions) 2014 Cash Flows from Operating Activities: Net earnings $ 4,279 $ 2,031 Adjustments to reconcile net earnings to net cash provided by operating activities - Depreciation and amortization 1,742 1,316 Change in fair value of warrants and related amortization (779) 385 Loss on exercise of call option 866 Gain on previously held equity interest (563) Deferred income taxes (32) 177 Stock compensation expense 109 Equity earnings in Alliance Boots (315) 1517) Other 728 181 Changes in operating assets and liabilities - Accounts receivable, net (338) 1616 Inventories 719 860 Other current assets 22 (10) Trade accounts payable 268 339) Accrued expenses and other liabilities 170 195 Income taxes (335) 17 Other non-current assets and liabilities (11) Net cash provided by operating activities 5,664 3,893 Cash Flows from Investing Activities: Additions to property, plant and equipment (1,251) (1,100 Proceeds from sale leaseback transactions 867 67 Proceeds related to the sale of businesses Nearly $4.5 billion invested 93 Proceeds from sale of other assets to acquire another company 184 Alliance Boots acquisition, net of cash acquired 14,461) Other business and intangible asset acquisitions, net of cash acquired (371) 344 Purchases of short-term investments held to maturity (49) 1591 Proceeds from short-term investments held to maturity Investment in Amerisource Bergen 493) Other (59) (86) Net cash used for investing activities 14,276 (1,731 Cash Flows from Financing Activities: Borrowed about $12.3 billion Payments of short-term borrowings, net in 2015 and repaid about Proceeds from issuance of long-term debt 12,285 $10.5 in 2015 Payments of long-term dett (10,472) 550) Proceeds from financing leases 268 Stock purchases (1,226 (705) Proceeds related to employee stock plans 503 612 Cash dividends paid (1384) (1,199 (395) (48) Net cash used for financing activities 1915 (1,622 Effect of exchange rate changes on cash and cash equivalents (119) Changes in Cash and Cash Equivalents: Net increase in cash and cash equivalents 354 540 Cash and cash equivalents at beginning of period 2,646 2,106 Cash and cash equivalents at end of period 3,000 $ 2.646 The accompanying Notes to Consolidated Financial Statements are an integral part of these Statements. (1,212) 115 20 30 814 139 50 58 1630) 168) 16 (224) (45) (1,996) 1220 4,000 (4,300) (615) 486 (1,040) (27) (1,496) Other 809 1,297 $ 2106