Arrange the following in correct sequence for cash flow statement as…

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

Cash from operating activities under the indirect method starts from the net profit before tax and extraordinary items, so the profit after tax is first converted to it; tax paid is deducted at the end.

(C) Profit after Tax and Extraordinary Items — the figure in the Statement of Profit and Loss.
(A) Profit before Tax and Extraordinary items. — tax and extraordinary items added back; the starting point of the operating section.
(D) Operating profit before working capital changes — after adding back non-cash and non-operating items.
(E) Cash from Operating Activities before Tax paid — after the working capital changes.
(B) Cash from (used in ) Operating Activities — after deducting income tax paid.

Note: In the NCERT proforma below, the lines under “Add” and “Less” are misprinted; the book’s own text says that a decrease in current assets and an increase in current liabilities are added, and an increase in current assets and a decrease in current liabilities are deducted.