Question
A company has Net Profit before tax = ₹15,00,000.
Depreciation charged = ₹2,00,000. Loss on sale of machinery = ₹50,000. Increase in Debtors = ₹1,50,000. Increase in Creditors = ₹1,00,000. Tax paid = ₹3,00,000. Calculate cash flow from operating activities.Solution
NPBT = 15,00,000 + Non-cash expenses (2,00,000 + 50,000) = 17,50,000. Working Capital adj. = –1,50,000 + 1,00,000 = –50,000. = 17,00,000. Less tax = 3,00,000 → 14,00,000.
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