Cash from Operating activities will decrease due to: |
Increase in Current Assets Decrease in Current Liabilities Both 1 and 2 None of 1 and 2 |
Both 1 and 2 |
The correct answer is option 3- Both 1 and 2. The increase in current assets and decrease in current liabilities are deducted from the operating profit before working capital changes, and the decrease in current assets and increase in current liabilities are added to the operating profit before working capital changes, so as to arrive at the exact amount of net cash flow from operating activities. |