Orion Corporation reported net income of $31,000, depreciation expenses of $18,000, an increase in Accounts Payable of $3,000 and a decrease in Accounts Receivable of $2,500. Under the indirect method, net cash flow from operating activities is:

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Net cash flow from operating activities is calculated by adjusting net income for non-cash expenses and changes in working capital. Start with net income of $31,000, add back depreciation of $18,000 (a non-cash expense), add the increase in Accounts Payable of $3,000 (a source of cash), and add the decrease in Accounts Receivable of $2,500 (also a source of cash). This results in a total of $54,500.

Orion Corporation Reported Net Income of $31,000, Depreciation Expenses of $18,000