Question
From the following data, compute funds from operations:
Net profit ₹8 lakh, Depreciation ₹2 lakh, Loss on sale of asset ₹50,000, Profit on sale of investments ₹1,00,000, Provision for tax ₹3 lakh.Solution
• Funds from operations = Net profit + Depreciation + Loss on asset sale – Profit on investment sale + Provision for tax. = 8 + 2 + 0.5 – 1 + 3 = ₹12.5 lakh.
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