The following statement of cash flows is adapted from Shanteza, Inc.’s 2020 annual report. Amounts are shown in millions of dollars.

Required

Analyze Shanteza’s statement of cash flows by making at least two observations about each section of the statement.

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2020 2019 2018 Cash flows from operating activities Net income $ 967 $ 833 $ 778 Adjustments to net income Depreciation and amortization 568 547 530 Other non-cash items 125 56 26 Changes in operating assets and liabilities Merchandise inventory 51 252 (97) Other assets 34 18 12 Accounts payable Accrued expenses and other liabilities Income taxes payable (4) (235) 199 (6) 180 109 (94) (4) (102) Net cash provided (used) by operating activities 1,412 2,081 1,250 Cash flows from investing activities Purchase of property and equipment Proceeds from sale of property and equipment (431) 1 (682) (572) 11 22 Purchase of short-term investments (75) (894) (1,460) Maturities of short-term investments 251 1,287 1,841 Acquisition of business, net of cash acquired Change in restricted cash Change in other assets (142) (1) 7 11 (1) (3) Net cash provided (used) by investing activities (398) (274) (150) Cash flows from financing activities Payments of long-term debt Purchase of treasury stock Cash dividends paid (138) (705) (243) (326) (1,700) (252) 165 (1,050) (265) Other 63 210 Net cash provided (used) by financing activities (1,023) (2,113) (1,105) Change in cash Cash, beginning balance Cash, ending balance (9) (306) (5) 1,724 2,030 2,035 $ 1,715 $ 1,724 $ 2,030