While calculating cash flow from operating activities what is added in the figure of net profit?

Decrease in Stock

The correct answer is option 2- Decrease in Stock.

Decrease in Stock is added to net profit while calculating cash flow from operating activities.

Changes in current assets and liabilities during the period: Increase in current assets and decrease in current liabilities are to be deducted while increase in current liabilities and decrease in current assets are to be added up from net profit to calculate cash flow from operating activity. Thus, an increase in stock, an increase in debtors, and a decrease in creditors are to be deducted.