Arrange the following in proper sequence while preparing cash flow st…

The correct answer is Option (2) → (D), (A), (C), (B)

(D) Calculate net profit before tax and extraordinary items in working note — first. Under the indirect method this figure is the starting point of the operating section.

(A) Net cash flow from operating activities — second. The net profit is adjusted for non-cash and non-operating items and for working capital changes, and income tax paid is deducted.

(C) Cash flow from investing activities — third. Purchases and sales of fixed assets and investments come next.

(B) Cash flow from financing activities — last. Issue and redemption of shares and debentures, borrowings, interest and dividends paid.