Calculate cash from operations

                                                                                                                                           

MBA

Accounting for Managers

ASSIGNMENT

 

Course Code: MMPC-004

Assignment Code: MMPC-004/TMA/JULY/2022 

Coverage : All Blocks

5. From the following calculate cash from operations:

To calculate cash from operations, we need to adjust the net profit for non-cash items and changes in working capital. 

Starting with the net profit of Rs. 10,000, we need to add back the non-cash expenses and losses, which are: Depreciation: Rs. 2,000 Loss on sale of plant: Rs. 1,000 Goodwill written off: Rs. 4,000 So, the total adjustments to net profit are: 2,000 + 1,000 + 4,000 = Rs. 7,000. 

Next, we need to adjust for changes in working capital, which include changes in current assets and liabilities such as accounts receivable, inventory, accounts payable, and accrued expenses

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