Which financial statement reconciliation reconciles net income to cash generated from operating activities under the indirect method?

Explanation

• The Indirect Method converts net income (accrual basis) into operating cash flow by adjusting for non-cash expenses (depreciation) and working capital shifts.
• Non-cash costs like depreciation are added back to net income; gains on asset sales are subtracted.
• Increases in current operating assets (e.g., inventory) reduce cash, while increases in current liabilities increase operating cash flow.