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The statement of cash flows for Snap-On Incorporated for the year ended January 1, 2011, (which is the company's 2010 fiscal year) includes the following
The statement of cash flows for Snap-On Incorporated for the year ended January 1, 2011, (which is the company's 2010 fiscal year) includes the following items (excerpts only): (in $ millions) 2010 2009 Cash flows from operating activities: Net earnings 193.0 143.7 Depreciation 48.7 49.9 Change in accounts receivable (56.5 ) 52.4 Change in accounts payable 26.2 (7.1) Net cash provided by operating activities 140.4 347.1 Properties of various discussions Q1: Why does Snap-On add back depreciation to compute net casni provined by operating activities? Is depreciation a source of cash? Q2 Snap-On reports cash flows associated with accounts receivable. In 2009, this item is a cash inflow of $52.4 million and in 2010 this item is a cash outflow of $56.5 million. Explain why this item is on the statement. Why is it a cash inflow one year and a cash outflow the other year? C. Did Snap-On accounts payable increase or decrease during 2009? How do you know
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