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Cash flows from operating-net lossOn its income statement for a recent year, continental Airlines, Inc., reported a net loss of $471 million from operations. On its statement of flow, it reported $1,241 million of cash flows from operating activities.Explain this apparent contradiction between the loss and the positive cash flows.

Question

Cash flows from operating-net loss

On its income statement for a recent year, continental Airlines, Inc., reported a net loss of $471 million from operations. On its statement of flow, it reported $1,241 million of cash flows from operating activities.

Explain this apparent contradiction between the loss and the positive cash flows.

 

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Step 1

The contradiction between the loss and the positive cash flows is as follows:

With the net loss reported on the income statement some of the items are need to be added i...

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