Cash Flow Process

Question 1

Step 1

Answer 1

Profit before interest and tax

Question 2

Step 2

Answer 2

Adjustments for : All non-cash expenses are reversed out e.g Depreciation, provision for bad debts.

Question 3

Step 3

Answer 3

Adjustments for cont’d : gain/loss on sale of NCA, Interest Revenue. = Operating profit before WC changes

Question 4

Step 4

Answer 4

Reverse all changes in Working Capital (except cash,bank,taxes and dividends) = cash generated from operations

Question 5

Step 5

Answer 5

Cash Flows From Investing Activities (proceeds of sale/Purchase of NCA, interest/dividend revenue received) = Net cash from investing activities

Question 6

Step 6

Answer 6

Cash Flow from Financing Activities(shares,equity,debt borrowing, dividends paid, repayment of loan)

Question 7

Step 7

Answer 7

Net cash increase in cash & cash equivalents + cash at beginning of period = cash and cash receipts at end of period

Question 8

Step 8

Answer 8

NON-CASH INVESTING & FINANCING ACTIVITIES