Question

Will 'Net decrease in working capital' other than cash and cash equivalents, increase, decrease or not change Cash Flow from Operating Activities? Give reason in support of your answer.

Answer 1

The net decrease in working capital or decrease in current assets with an increase in current liabilities or we can say an increase in assets is less than the increase in current liabilities. In both the cases, an outflow of cash would be involved. So, the net effect is decreased in cash flow from operating activities.