![]() Less: Income tax paid (Net of tax refund received) (D)Ĭash flow before extraordinary items (C-D) = (E) The Cash flow statement under Direct method is prepared as follows: Cash flow from Operating activitiesĬash generated from operations (A-B) = (C) The fundamentals of preparation of cash flow statement under Direct method is more or less same as in Indirect method with only a few exceptions in terms of its presentation. Net increase in cash and cash equivalents (G+H+I) = (J)Ĭash and cash equivalents and the beginning of the period (K)Ĭash and cash equivalents and the end of the period (J+K) Net cash flow from financing activities (I) Purchase of shares/debentures/fixed assets Net cash flow from operating activities (E+F) = (G) Less: Income tax paid (Net tax refund received) (D)Ĭash flow from before extraordinary items (C-D) = (E) Net increase / decrease in working capital (B)Ĭash generated from operations (C) = (A+B) Operating profit before working Capital changes (A) Net profit before Tax and extra ordinary Items
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