The following information was taken from the 2012 annual report and statement of cash flows of Eli Lilly, a major pharmaceutical (dollars in millions):*

*Change in the cash balance does not always equal the sum of cash from operations, investing, and financing due to adjustments for exchange rate changes.

REQUIRED:
a. Discuss the cash management profile of Lilly across the three-year period. Where did the company get its cash, and what did it do with it?
b. Explain how the cash management profile relates to the company’s financial condition and performance over this timeperiod.

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Net income (loss) Net cash from operations Net cash from investing activities Net cash from financing activities Change in cash 2012 $4,089 5,305 (2,833) (4,420) (1,904) 2011 $4,348 7,235 (4,824) (2,370) 2010 $5,070 6,857 (3,160) (2,022) 1,530 (71)