Net cash flow from operating activity is $87,000
<h3>Define cash flows. </h3>
The net amount of cash and cash equivalents coming into and going out of a business is referred to as cash flow. There are two approaches to prepare cash flows: directly or indirectly. Regardless of the approach used, the operating activities make up the majority of the cash flow statement that fluctuates. The operating operations under the indirect approach begin with the net income. Since depreciation, amortization, and impairment are non-cash items that are often not included in net income, they will be added back to the net income. Investment-related expenses include revenue from investments and profits from the sale of non-current assets. Additionally, changes in working capital (Inventory, trade payables, and trade receivables) are netted out, and the resulting value is also utilized to alter net income. This displays the operating activity's net income.
Cash flow from Operating Activities using indirect method start with;
Net income: $63,000
Add back depreciation: $24,000
Add/less profit/loss from sale of assets: $0,000
Changes in Working Capital
Increase or decrease trade receivable: $ 0,000
increase or decrease in inventory: $ 0,000
Increase or decrease in treaded payable: $ 0,000
Net cash flow from operating activities: $87,000
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