Question
Net profit for the year = ₹5,00,000
Depreciation = ₹1,20,000 Increase in Inventory = ₹70,000 Increase in Creditors = ₹50,000 What is the Cash Flow from Operating Activities?Solution
Start with Net Profit = ₹5,00,000 • Depreciation = ₹1,20,000 – Increase in Inventory = ₹70,000 • Increase in Creditors = ₹50,000 = ₹5,00,000 + ₹1,20,000 – ₹70,000 + ₹50,000 = ₹6,00,000
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