Ontario Power Generation (OPG) Inc.'s statement of cash flows reported cash provided by operating activities of $816 million in 2010, a $517 million increase over the $299 million reported in 2009. It reported profit of $649 million in 2010, a $26 million increase over profit of $623 million reported in 2009. Cash and cash equivalents reported on the statement of financial position also increased, by $209 million, from $71 million in 2009 to $280 million in 2010. OPG includes its money market securities, with a maturity date of three months or less, as cash equivalents.
Instructions
(a) How is it possible that OPG can have only $649 million of profit in 2010 but generate $816 million of cash provided by operating activities in the same year?
(b) Explain how OPG increased its profit by only $26 million from 2009 to 2010, while its cash provided by operating activities increased by $517 million over the same period.
(c) Explain how OPG can have an increase of $517 million in its cash provided by operating activities in 2010 while reporting an increase of only $209 million in its cash and cash equivalents over the same period.