Arrange the following activities in correct sequence for Cash Flow Statement.
A. Operating profit before working capital changes
B. Purchase of fixed Assets
C. Depreciation
D. Decrease in Inventories
E. Proceeds from long term borrowings
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → C, A, D, B, E
A cash flow statement shows operating, then investing, then financing activities; within operating activities the indirect method works down from net profit:
(C) Depreciation – a non-cash item, added back to the net profit first.
(A) Operating profit before working capital changes – the sub-total reached after these adjustments.
(D) Decrease in Inventories – a working capital change; a decrease in a current asset is added.
(B) Purchase of fixed Assets – an investing activity, shown after operating activities.
(E) Proceeds from long term borrowings – a financing activity, shown last.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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