Cigna Corp. (CI) provides insurance services, and Deere & Company (DE) manufactures and sells farm and construction equipment. The following data (in millions) were adapted from recent financial statements of each company.

1. Compute the difference between cash flows from operating activities and net income.

2. Express the difference in (1) as a percent of accrual net income. Round to two decimal places.

3. Which company’s accrual based net income is closer to what would be reported if the company used the cash basis? Why?

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Cigna Deere Net income (accrual basis) Cash flows from operating activities Depreciation $2,232 4,086 $2,159 2,200 1,716 566