 So, our shortcut rule for treating changes in current assets are as follows. We add back decreases in current assets, and we deduct increases in current assets. Let me show you why that is. Let's review the example accounts receivable decreased from 4,000 to 2,000. Another way to look at this account is with the T account format. You can see the beginning balance is 4,000 and the ending balance is 2,000. When a company records credit sales, it debits accounts receivable and credits sales revenue. In this example, I just made up sales of $50,000. But it doesn't matter what amount you use, the math is going to work out. When we collect from a customer, we credit accounts receivable. So what amount do we need to make this T account balance? We need collections of $52,000 to make the account balance. Notice that the collection is $2,000 more than sales revenue. That's important. So back to our shortcut rule. We add back decreases in current assets. Because in this example, cash collections are $2,000 more than sales revenue. Since sales revenue was used to arrive at net income, we need to add $2,000 more to net income to arrive at the cash amount. I assumed net income is $10,000 in this short example, and so the cash provided from operating activities would be $12,000. Let's do the same thing only now. Let's assume accounts receivable increases $3,000 from $5,000 to $8,000. So our cash receipts must be $3,000 less than our sales revenue in order to make the account balance. So back to our shortcut rule. We deduct increases in current assets. Because in this example, cash collections are $3,000 less than sales revenue. Since sales revenue was used to arrive at net income, we need to deduct $3,000 from net income. I assumed net income was $10,000 in this example, so cash provided by operating activities is $7,000.