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Hi Sir!
Can you explain to me why gain/loss on disposal is added/deducted from Profit before tax as a non-cash expense/income to calculate Net Cash from Operating activities?
Thanks Sir
The profit or loss on sale is not a cash flow (just as depreciation is not a cash flow) and is therefore adjusted for in arriving at the cash flow from operating activities.
The cash flow is the actual proceeds from the sale and this is shown under the heading of cash flows from investing activities.
Have you watched my free lectures on statements of cash flows where I do explain this?
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