Fantastic Net Cash Provided By Operating Activities

This amount is found by adding the total of all borrowings and subtracting cash on hand.

Net cash provided by operating activities. The changes in the following working capital items have not been considered in above computation. Cash flow from operating activities does not include long-term capital expenditures or investment revenue and expense. Direct method of operating activities cash flows is one of the two main techniques that may be used to calculate the net cash flow from operating activities in a cash flow statement the other being indirect method.

Solution Decrease in inventory has been computed by taking beginning inventory and ending inventory figures from income statement. Since the income statement is prepared on accrual basis in which revenue is recognized when earned and not when received therefore net income does not represent the net cash flow from operating activities. Decrease in non-trade note payable.

Accounts receivable and inventories decreased by 4000 and 13000 respectively. Since the income statement uses accrual-based accounting. It is the first section depicted on a companys cash flow statement.

Net cash from operating activities refers to the relative change in a companys cash position from one period to the next created by operating activities. Cash flow from operating activities identifies the movement of the primary revenue-generating activities for the reporting period. If cash sales have also occurred receipts from cash sales must also be included to develop an accurate figure of cash flow from operating activities.

Any cash flow relating to non-trade notes payable is reported in financing activities section of statement of cash flows. Net income 1705000 Amortization of discount 10000 Loss on retirement 28000 Increase in accounts receivable 80000 Increase in inventory. This amount shows the outstanding debts the company would owe if all cash on hand was used to pay all debts owed.

Operating Cash Flow Operating Cash Flow OCF is the amount of cash generated by the regular operating activities of a business in a specific time period. Prepaid expenses and accounts payable increased respectively by 400 and 12000. Means with respect to any year the net cash provided by operating activities of the Company and its consolidated subsidiaries for such year as reviewed by the Companys independent auditors and released by the Company to the public.