While calculating operating profit in the cash flow statement which will be added to net profit?

Increase in General Reserve

The correct answer is option 3- Increase in General Reserve.

Operating profit in the cash flow statement is derived from the income statement's net profit figure by adjusting for non-cash expenses (such as depreciation and amortization) and non-operating items. Among the given options except Increase in General Reserve, all other options are deducted from the net profit to calculate the operating profit.

1. Interest received: This is a non-operating activity because it's not directly related to the core operations of the business. It id deducted to calculate operating profit.

2. Profit on sale of asset: This is a non-operating activity because it represents a one-time gain and is not part of the regular business operations. It would not be added to calculate operating profit.

3. Increase in general reserve: This represents a portion of profits set aside by the company for specific purposes. Since it's related to the company's operations and financial management, it could be considered as an adjustment to operating profit, depending on how it's classified and what it represents. If it's considered part of the core business activities, it could be added to calculate the operating profit.

4. Refund of tax: This is considered a non-operating item, as it's not directly related to the day-to-day operations of the business. It would not be added to calculate the operating profit.