Calculation of Cash from operating Activities

Calculation of Cash from operating Activities (Steps) Step 1. Calculate Net Profit before Tax and Extraordinary Items. The first step while calculating cash from operating activities is the calculation of Net Profit before Tax and Extraoridinary Items explained below. Difference between the opening and closing balance of Profit and Loss Account …. Add:- Proposed dividend of current year Interim Dividend Paid during the year Transfers to Reserves Deferred Tax Liabilities (Net) Provision for expenses Provision for Tax made during current year Extraordinary Items ,if any, debited to Statement of Profit…

net profit before tax and extraordinary items

Net Profit Before Tax and Extraordinary Items Net profit before Tax and Extraordinary Items is the starting point for calculating Cash from Operating Activities. To determine Net profit before Tax and Extraordinary Items we make some adjustments to the Net Profits as shown by the Statement of Profit and Loss of a concern by addind and subtracting various Items. Calculation of Net Profit Before Tax and Extraordinary Items Difference between the opening and closing balance of Profit and Loss Account Add:- Proposed dividend of current year Interim Dividend Paid during…

operating profit before working capital changes

Operating Profit Before Working Capital Changes For the determination of operating Profit before working capital changes, some adjustments are made to the Net Profit before Tax and Extraordinary Items for Non-cash and Non-operating items . Calculation of Operating Profit Before Working Capital Changes: Net Profit Before Tax and Extraordinary Items Add:-Depreciation Unamortised Expenses written off(eg share issue expenses, Discount on issue of shares, Loss on issue of debentures) Goodwill, patents etc amortised Loss on sale of Fixed Assets Interest on borrowings Interest on Debentures Less:-Interest income Dividend Income Rent income…