There are two options for reporting the Operating Section of the statement of cash flows. What are the distinct differences between the two methods, and why do you think that FASB chose the direct method as the preferred method, and why do the vast majority of companies still use the indirect method? Explain, with examples, the importance of this financial statement. Please take into consideration how it might be used to enhance or supplement the other three statements.

The statement of cash flows is one of the most important financial statements of a company, since a company might be very profitable but if it doesn't have enough cash to function, then it will go bankrupt. This is normally more important when things are not going well, e.g. Ford didn't go bankrupt during the great recession because it had lots of cash, while GM and Chrysler ran out of cash and had to be bailed out.

Companies can survive without making any profits during many years and still be a success, e.g. Amazon, but no company can survive without cash. In finance and investing, cash is king.

The two ways to calculate cash flows are the direct and indirect method. The direct method is calculating through the differences between cash inflows and outflows. On the other hand, the indirect method starts with net income and is then adjusted for depreciation and amortization, increase in accounts receivables, etc.  

Personally, I prefer the indirect method because it is much more simple to prepare and understand. Folks at FASB and IASB prefer the direct method because according to them it provides a clearer picture of the company's cash outflows and inflows. It sounds reasonable until you learn that companies that present the cash flows using the direct method must also present them using the indirect method. Or the companies can simply present the indirect method. So I'm not really sure that their argument is very solid.

being born in poverty would limit the people's chances, opportunities and benefits.

this happen because of several things, such as:

- poor people tend to gain less access to good education and nutrition. this mean that their chance to obtain high paying jobs would also be limited.

- poor people tend to socialize with other poor people while the rich tend to socialize with other rich people. this means that simply throguh their social circle, rich people would have more business opportunities compared to the poor people.

- rich people tend to have more capital in their disposal. this would benefit them in business since it is far easier for them to fund their business operation compared to poor people.