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Dear tutor
I don’t understand how this question calculated net cash from operating activities
1. why add back disposal of cars $30m? should it be deducted as it’s added in investment cash flow?
2. added reclassification of interest paid, why doesn’t include $7m in inventory?
3. why add back tax credit not recorded? is it part of finance cost to add back?
4. associate’s profit- non- cash flow $4m, why deducted?
5. why calculate purchase of associate in that method? why deducted in calculating FCF? becasue it’s part of CAPEX?
6. why add back pension deficit payment to FCF not deducted?many thanks
1. I FRS 15 implies that when the cars are transferred to inventory the cash flow should be required should be recorded as operating.
2. Interest capitalised on PPE is and investing outflow. Interest on inventory is an operating outflow.
3. If something is described as a cash tax inflow then surely it must be included in the cash flow statement.
4 . I am a bit surprised that you are asking this. We always deduct the share of operating profits. Can I suggest that you rework the session on cash flows.
5. The purchase of the associate is and investing cash flow.
6. I have no idea what your question meansIn future please could you kindly post your questions in separate threads
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