The income statement and balance sheet provide the following information for 2019.

1. Calculate cash flows for operations using the indirect method. 

2. Why are the reasons for the difference between cash flow from operations and net income important to financial analysts?

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INCOME STATEMENT FOR YEAR ENDED 30 JUNE 2019 Service revenue Expenses: Salaries Depreciation Loss on sale of equipment Other expenses Net loss Partial balance sheet as at 30 June Accounts receivable Salaries payable Other accrued expenses $ 40 000 15 000 2 000 7 500 2019 10 000 5 000 1 000 $ 60 000 64 500 (4 500) 2018 26 000 2 000 5 000