What information can be gathered from Facebook’s statement of cash flows for the fiscal year ended December 31, 2019? Find the statement of cash flows in Facebook, Inc.’s annual report for the year ended December 31, 2019, and use it to answer the questions below.

Discussion Questions

• Did Facebook use the indirect method or the direct method to prepare its statement of cash flows? How do you know?

• In your opinion, what were the major differences between cash provided by operations and accrual basis net income? Which measure do you think gives the best picture of Facebook’s operations?

• In your opinion, what were the major sources and uses of cash in the investing activities? Does that information help you understand the balance sheet? What conclusions do you draw?

• In your opinion, what were the major sources and uses of cash in the financing activities? Does that information help you understand the balance sheet? What conclusions do you draw?

• What overall conclusion(s) do you draw from the financial statements as a whole? Did the statement of cash flows help at all?