Problem Walkthrough

Income Statement and Net Income

Income Statement and Net Income

According to its Statement of Operations (Income Statement), the net income of Apple in 2016 was $45.687 billion. The cash generated by operating activities; however, was $65.824 billion. Since net income represents the profits generated from operating activities, why is net income not the same as the cash generated? And, why does Apple have much more cash generated by operating activities?