Question
Net profit before tax = Rs. 8,00,000. Depreciation = Rs.
1,50,000. Increase in debtors = Rs. 80,000. Increase in creditors = Rs. 60,000. Income tax paid = Rs. 2,00,000. What is cash flow from operating activities (indirect method)?Solution
Start with NPBT 8,00,000 + depreciation 1,50,000 – debtors 80,000 + creditors 60,000 = 9,30,000. Less tax paid 2,00,000 = 7,30,000.
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