Practicing Success
While calculating cash flow from operating activities which will be deducted? |
Decrease in Prepaid Expenses Increase in Trade Payables Increase in Trade Receivables Decrease in Trade Receivables |
Increase in Trade Receivables |
The increase in current assets and decrease in current liabilities are deducted from the operating profit, and the decrease in current assets and increase in current liabilities are added to the operating profit so as to arrive at the exact amount of net cash flow from operating activities. An increase in Trade Receivables is an increase in current assets. |