Cash Flow from Operating Activities | Class 12

Cash flow from operating activities indicates the amount of money a company brings in from regular business activities, such as manufacturing and selling goods or providing a service. It does not include long-term capital, borrowing cost or investment costs.

Examples of the same are:

  1. Cash received from Debtors and Bills Receivables
  2. Payment made to Creditors and Bills Payable
  3. Cash receipts from sale of goods and rendering of services
  4. Cash payments for purchase of goods and services
  5. Payments made or refunds of income tax
  6. Wages, salaries and other payments to employees
  7. Receipts in cash from royalties, fees, commission, and other revenue




Cash flow from operating activities example 1:

Calculate cash flow from operating activity from the following information.

Explanation : –

Cash flow from operating activities example 2:

Cash flow from operating activity from the following information will be:

Explanation : –




Cash flow from operating activities example 3:

AB Ltd had the following balances:

During the year, the company had sold 20 % of its investment at a profit of Rs 21,000. Calculate cash flow from operating activity and cash flow from investing activity if company earned a profit of Rs 50,000 during the year.

Explanation : –

Share on whatsapp
Share on facebook
Share on twitter
Share on linkedin
Share on email

Leave a Comment