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I wonder if the increase in receivables is a cash outflow as an example in the workbook on preparing cash forecast adjusts the increase in receivables by deducting it. However, I thought no money was spent on these increases as the cash to be received on credit sales will be collected later.
What question are you referring to – Please let me know
Anyway….Receivables are a current asset, any increase is shown as a reduction in cash flow!
So when current asset decreases there is inflow of cash for example: when debtors are decreased it means they have paid their dues and therefore you get cash.
similarly when debtors i.e accounts receivable increases it means there is no inflow of cash and an increase in debtors is as good as cash outflow. hence, you deduct it.
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