Required. 1) Did the company use the direct or indirect method of disclosing cash flows? (2 mark)

2) Comment on the relationship between cash flow from operations and net income for the year of the statement and the previous year. (2 marks)

3) What was the most significant source of cash from operating activities during the period covered by the statement and the previous period? (2 marks)

4) What were the firms major investing activities during the period covered by the statement and the previous period? Were cash flows from operations more or less than cash flows from investing activities? (2 marks)

5) What were the most significant cash flows from financing activities during the year of the statement and the previous year? (2 marks)

AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31 2015 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD OPERATING ACTIVITIES Net income (loss) Adjustments to reconcile net income (loss) to net cash from operating activities 8,658 $ 14,557 $ 15,890 (241) Depreciation of property and equipment, including internal-use software and website development, and other amortization, including capitalized content costs Stock-based compensation Other Other expense (income), net Deferred income taxes Excess tax benefits from stock-based compensation 8,116 2,975 160 4,746 6,281 operating expense, net 129 250 81 (119) (246) (829) Changes in operating assets and liabilities: Inventories Accounts receivable, net and other Accounts payable Accrued expenses and other (1,193) (1,039) 1,759 (2,187) (1,755) 4,294 (3,367) 5,030 1,724 11,931 9,976 16,443 706 itions to unearned revenue 4,433 69 6,842 7,401 6,109 11,920 Amortization of previously unearned revenue Net cash provided by (used in) operating activities INVESTING ACTIVITIES Purchases of property and equipment, including internal-use software and website development, net Acquisitions, net of cash acquired, and other Sales and maturities of marketable securities Purchases of marketable securities (4,589) (795) 3,025 (6,737) (4,893) (979) 3,349 4,733 Net cash provided by (used in) investing activities (5,065 (6,450 (9,876 FINANCING ACTIVITIES Excess tax benefits from stock-based compensation Proceeds from long-term debt and other Repayments of long-term debt and other Principal repayments of capital lease obligations Princi 119 353 (1,652) (2,462) 829 6,359 (1,285) (3,860) nts of finance lease obligations (2,911 (212) 3,444 19,334 Net cash provided by (used in) financing activities 4,432 Foreign currency effect on cash and cash equivalents Net increase (decrease) in cash and cash equivalents CASH AND CASH EQUIVALENTS, END OF PERIOD 3,763 (374) 1,333 15,890 $ 5,899 14,557 $