Question
Based on the below information, calculate the net cash
flow of the company from operating activities? Net Profit = ₹1,80,000 Depreciation = ₹40,000 Increase in Debtors = ₹20,000 Decrease in Creditors = ₹10,000 Loss on sale of equipment = ₹5,000Solution
Cash flow from Operating Activities: Net Profit = ₹1,80,000 Add: Depreciation = ₹40,000 Add: Loss on Sale = ₹5,000 Less: Increase in Debtors = ₹20,000 Less: Decrease in Creditors = ₹10,000 Total = ₹1,80,000 + ₹40,000 + ₹5,000 – ₹20,000 – ₹10,000 = ₹1,95,000
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