Question

If manufacturing expenses are Rs 20000, interest expenses are Rs 40000, cash sales is Rs 30000. Increase in inventory and debtors is Rs 5000 and Rs 7000 respectively. While increased in accounts payable is 9000. Calculate the cash flow from operations?

Answer 1

Answer:

Solution:

Cash sales  - Increase in inventory - Increase in debtors + Increase in account payable + manufacturing expense + interest expenses = Cash flow  

30000 Rs – 5000 Rs -7000 Rs +9000 Rs +20000 Rs +4000 Rs = 51000 Rs

Answer: Total cash flow from the operation is  Rs 51,000.

Answer 2

Explanation:

Rs. 84,000. Cash flow from operating activities (CFO) is a term of accounts which shows the amount of money that a company accumulates from an ongoing regular business activity like manufacturing, providing a service or selling goods. Cash flow from operating activities (CFO) does not include investment costs or long-term capital expenditures as they are essentially one-time activities. CFO is more directed towards the core business and it is also called as net cash from operating activities or operating cash flow (OCF) in general terms.