Which of the following statements is correct?
Statement 1: The dividend paid is always shown as an operating activity in the cash flow statement.
Statement 2: Depreciation and amortization, being non-cash expenses, are deducted from net profit before tax and extraordinary items while calculating operating profit in the cash flow statement.
Answer & explanation
Correct answer: option 4
* Depreciation and amortization, being non-cash expenses, are added not deducted from net profit before tax and extraordinary items while calculating operating profit in the cash flow statement.
* The dividend paid is always shown as an operating activity in the cash flow statement- It is always a financing activity.