Practice Solved Example (7) - Cash Flow

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8 questions

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6 sample questions

Question 1.
What do you add back to the net profit before tax?
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Consider what non-cash expenses are adjusted.
Question 2.
What happens when the amount of debtors increases?
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Think about how sales on credit affect cash flow.
3Question 3.
What does a cash flow statement NOT include?
- Cash transactions
- Accrual transactions
- Cash equivalents
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Consider the basis on which cash flow is measured.
4Question 4.
True or False: Depreciation is added back when calculating cash flow from operations.
- True
- False
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Think about how non-cash expenses are treated.
Question 5.
A company’s profit before tax is ₹300,000. It has a ₹70,000 depreciation, ₹40,000 increase in debtors, ₹13,000 decrease in creditors, and ₹60,000 tax paid. What is the Net Cash Flow from Operating Activities?
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Apply all adjustments carefully in the calculation.
Question 6.
Discuss and illustrate how cash flow from investing activities differs from cash flow from operating activities. Give examples.
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Consider what activities each category covers.

4 more questions in this section. Enroll free to practise them all.