Pls,Sir. Why do we;
1.subtract profit on sale of non-current assets(income) or investment instead of adding
2.add depreciation (expense) instead of subtracting it
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STATEMENT OF CASH FLOWS
11y ago#1I really do suggest you watch the free lectures!
Profit on sale will have been included in the profit, but is not a cash flow so it needs removing.
Depreciation will have been charged against the profit, but it is not a cash payment and so it needs adding back.
The whole point is to convert the profit into a 'cash profit'.
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