Question
A company reports the following: • Net Income = ₹1,50,000 • Depreciation = ₹40,000 • Increase in Accounts Receivable = ₹25,000 • Increase in Accounts Payable = ₹15,000 • Gain on sale of equipment = ₹10,000 What is the Cash Flow from Operating Activities (using the indirect method)?
Solution
Operating Cash Flow (Indirect Method) = Net Income + Non-cash expenses – Non operating Gains + Increase in Current liabilities – Increase in current assets = 1,50,000 + 40,000 – 10,000 + 15,000 – 25,000 = 1,70,000
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