Identify the correct sequence for the following activities.

(A) Cash generated from operations
(B) Dividend tax paid
(C) Net profit before tax and extra ordinary items
(D) Operating profit before working capital changes
(E) Proceeds from sale of investment

Choose the correct answer from the options given below.

(C), (D), (A), (E), (B)

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

Operating Activities

(C) Step 1. Net profit before tax before extraordinary items- Firstly net profit before tax and extraordinary items is calculated to prepare cash flow statement.

(D) Step 2. Operating profit before working capital Changes- After net profit before tax and extraordinary items, non cash items are deducted or added to calculate the Operating profit before working capital Changes.

(A) Step 3. Cash generated from operations- Adjust the increase and decrease in current assets and current liabilities to calculate the cash generated from operations or operating activities.

Investing Activities

(E) Step 4. Proceeds from sale of investments- Sale of investments is a cash inflow from investing activities.

Financing Activities

(B) Step 5. Dividend tax paid- Dividend paid is a cash outflow from financing activity.