Question

From the following figures, calculate ‘cash from operating activities’:

	31.3.2023 (₹)	31.3.2024 (₹)
Profit & Loss Balance	5,00,000	3,00,000
Accumulated Depreciation	80,000	1,20,000
General Reserve	1,60,000	1,95,000
Outstanding Expenses	16,000	24,000
Trade Payables	75,000	91,000
Prepaid Salaries	5,000	2,000
Goodwill	20,000	15,000
Trade Receivables	2,10,000	2,40,000

Answer 1

Cash Flow from Operating Activities for the year ending 31st March, 2024
Particulars	Amount (₹)
Net Loss for the Year (P&L decrease: 3,00,000 − 5,00,000)	(2,00,000)
Adjustments for non-cash and non-operating items:
Add:
Increase in Accumulated Depreciation (1,20,000 − 80,000)	40,000
General Reserve (1,95,000 − 1,60,000)	35,000
Goodwill written off (20,000 − 15,000)	5,000
Operating Profit before Working Capital Changes	(1,20,000)
Changes in Working Capital:
Add:
Increase in Outstanding Expenses (24,000 − 16,000)	8,000
Increase in Trade Payables (91,000 − 75,000)	16,000
Decrease in Prepaid Salaries (2,000 − 5,000)	3,000
Less: Increase in Trade Receivables (2,40,000 − 2,10,000)	(30,000)
Net Working Capital Adjustment	(3,000)
Net Cash Used in Operating Activities	(1,23,000)