Following is the statement of cash flows for AstraZeneca, a multinational pharmaceutical conglomerate, headquartered in London, UK. The company uses IFRS for its financials and provides a conversion to U.S. $ as a convenience to investors.

Required

a. Why does AstraZeneca add back depreciation to compute net cash flows from operating activities?

b. Explain why the decrease in trade and other receivables is reported as a cash inflow and the increase in inventories is reported as a cash outflow. Explain why trade and other payables and provisions are shown as a use of cash.

c. AstraZeneca reports that it invested $ 672 million in property and equipment. Is this an appropriate type of expenditure for AstraZeneca to make? What relation should expenditures for PPE assets have with depreciation expense?

d. AstraZeneca indicates that it paid dividends of $ 3,665 million. How do we evaluate that use of cash relative to other possible uses for AstraZeneca's cash?

e. Provide an overall assessment of AstraZeneca's cash flows for 2012. In the analysis, consider the sources and uses of cash.

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ASTRAZENECA Consolidated Statement of Cash Flows For Year Ended December 31, 2012 ($ millions) Cash flows from operating activities Profit before tax...... Finance income and expense. Depreciation, amortisation and impairment. Decrease in trade and other receivables. Increase in inventories..... Decrease in trade and other payables and provisions. Non-cash and other movements... Cash generated from operations.. Interest paid.. Tax paid Net cash inflow from operating activities.. $7,718 430 2,518 755 (150) (1,311) (424) 9,536 (545) (2,043) 6,948