Huawei 2014 Annual Report Download - page 41

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39Management Discussion and Analysis
In 2014, Huawei's days of sales outstanding (DSO) was 95 days, 14 days fewer than the 109 days in 2013; its
inventory turnover days (ITO) increased by 40 days to 104 days compared with the 64 days in 2013. The company's
days of payables outstanding (DPO) was 101 days, 21 days longer than the 80 days in 2013. To respond to massive
4G network roll-out, the balance of inventory and trade payables in 2014 increased over the previous year.
As of December 31, 2014, total short-term and long-term borrowings amounted to CNY28,108 million, an increase
of 22.0% year-on-year from CNY23,033 million in 2013.
Cash Flow from Operating Activities
CNY Million 2014 2013 YoY
Net profit 27,866 21,003 32.7%
Adjustment for depreciation, amortization,
and non-operating loss, net 10,193 5,550 83.7%
Actuarial losses on defined benefit obligations (166) (618) (73.1%)
Cash flow before change in
operating assets and liabilities 37,893 25,935 46.1%
Change in operating assets and liabilities 3,862 (3,381) (214.2%)
Cash flow from operating activities 41,755 22,554 85.1%
Cash flow from operating activities in 2014 increased by 85.1% year-on-year to CNY41,755 million. This increase
was attributable to:
■ A net profit growth of 32.7% year-on-year due to the rapid growth in scale and reduction in net finance
expenses.
■ Adjustment for depreciation, amortization, and non-operating loss, net contributed another CNY4,643 million
to cash flow from operating activities compared with that in 2013.
■ Reduction in the capital tied up in operating assets and liabilities in 2014 contributed CNY3,862 million to the
cash flow from operating activities.