Cash Flow from Operating Activities Class 12

Cash Flow from Operating Activities

Cash flow from operating activities indicates the amount of money a company brings in from regular business activities, such as manufacturing and selling goods or providing a service. It does not include long-term capital, borrowing cost, or investment costs.

Cash Flow From Operating Activities Example

1. Cash received from Debtors and Bills Receivables
2. Payment made to Creditors and Bills Payable
3. Cash receipts from the sale of goods and rendering of services
4. Cash payments for the purchase of goods and services
5. Payments made or refunds of income tax
6. Wages, salaries, and other payments to employees
7. Receipts in cash from royalties, fees, commission, and other revenue

Cash flow from operating activities example 1:

Calculate cash flow from operating activities from the following information.

Explanation: –

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Cash flow from operating activities example 2:

Cash flow from operating activities from the following information will be:

Explanation: –

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Cash flow from operating activities example 3:

AB Ltd had the following balances:

During the year, the company had sold 20 % of its investment at a profit of Rs 21,000. Calculate cash flow from operating activities and cash flow from investing activity if the company earned a profit of Rs 50,000 during the year.

Explanation: –

Chapter 6 – Cash Flow Statement

1. Objectives and Benefits of Cash Flow Statement
2. Cash, Cash Equivalents and Cash flows
3. Ascertaining Cash Flow from Operating Activities
4. Ascertainment of Cash Flow from Investing
5. Cash Flow and Financing Activities
6. Preparation of Cash Flow Statement