Determine cash flow operating activities from the following information.
| Particulars | 31 March 2023 (₹) | 31 March 2022 (₹) |
| Inventory | 80,000 | 50,000 |
| Trade payables | 40,000 | 30,000 |
| Goodwill | 1,00,000 | 80,000 |
| Share capital | 15,00,000 | 10,00,000 |
| Debentures | 5,00,000 | 6,00,000 |
Profit during the year was ₹3,70,000.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹3,50,000.
Net Profit before Taxation and Extraordinary Items = 3,70,000
As there is not non cash expenses so the Operating Profit before working capital changes will be same 3,70,000
– Increase in Inventories (30,000)
+ Increase in Trade Payables 10,000
Net cash from Operating Activities = 3,70,000 - 30,000 + 10,000
= ₹3,50,000
- Goodwill affects investing activity
- Debentures and shares affects financing activity