 So, our shortcut rules for treating the changes in current liabilities are as follows. We add back increases in current liabilities, and we deduct decreases in current liabilities. Let me show you why that is. Let's use the example accounts payable increased from 5,000 to 8,000. Another way to look at this account is with the T account format. You can see the beginning balance is 5,000 and the ending balance is 8,000. When a company receives an invoice for warehouse rent, as an example, it debits rent expense and credits accounts payable. In this example, I just made up that that expense is $10,000, it doesn't really matter what amount you use, the math is going to work out. When we make the payment on the account, we debit accounts payable. So what amount do we need to make to make this T account balance? We need payments of $7,000 to make the account balance. Notice that the payment is $3,000 less than the rent expense. That's important. So back to our shortcut rule. We add back increases in current liabilities because in this example, our cash payments are $3,000 less than our rent expense. Since rent expense was used to arrive at net income, and it's an expense, so it deducts from that income, we need to add back $3,000 to net income. Now I just assume net income is $10,000 in this example, so the cash provided by operating activities is $13,000. Finally, let's do the same thing only now. Let's assume accounts payable decreases $4,000 from $9,000 to $5,000. Our cash payments must be $4,000 more than our expense in order for the account to balance. So back to our shortcut rule. We deduct decreases in current liabilities because in this example, cash payments are $4,000 more than rent expense. Since rent expense was used to arrive at net income, we need to deduct $4,000, additional $4,000 from net income. I assume net income is just $10,000 in this example, so the cash provided by operating activities is $6,000.