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Dear Sir,
in operating activities, we deduct the profit made on sale of non current assets? Is this because the proceeds from the sale is already included in the cash from investing activities?Also, why do we add the finance cost back to operating profits? is it because finance costs are already charged in financing activities?
Thank you so much sir
NCA – yes, your logic is correct.
FC – no – we ADD back finance costs because they are ACCRUALS BASED and we DEDUCT interest paid because it is cash based
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