Cash Flow Statement: Problems
and Solutions | Accounting
Cash flow statement
Cash from operation + cash from investment + cash from financing + opening balance of
cash = closing balance of cash
opening and closing balance is already given, now you will just know following figure
1st Step : To know Cash from operation
It means we are interested what amount of net profit in the form of cash from business operation.
For this take, net profit or net income as per above given
Add : Non - cash and non- operating expenses and losses. You can learn its list at here.
Deduct : Non- cash and non operating incomes from what balance will we receive after adding
above. You can learn list of these incomes at here.
Add : decrease in current asset and increase in current liabilities after comparing two years figures.
You can learn list of these items at here.
Deduct : Increase in current assets and decrease in current liabilities after comparing two years
figures. you can learn list of these items at here.
Deduct : Income Tax paid
2nd Step : To know cash from investment
In this section, we compare cash inflow and cash outflow of investment activities.
Inflow of cash
a) Sale of fixed assets
b) Dividend received
c) interest received
Less Outflow of cash
Cost of purchase of fixed assets
