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Hi,
Business Bank balance increased 750, issued shares 1000, repaid loan 750, purchased non-current asset 200, depreciation charged 100, working capital (other than bank balance) increased 575.
What is the profit?
Thanks a lot.
You must have an answer in the same book in which you found the question, so ask me whatever it is in the answer that you are not clear about.
I assume that you have watched my free lectures on cash flow statements? You know the cash flows from investing activities, the cash flows from financing activities, and the change in the bank balance – so you can work backwards and calculate the cash flows from operating activities as the missing figure.
Once you know the cash flow from operating activities, you can again work backwards by adjusting for the depreciation and increase in working capital in order to calculate the profit.
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