Why is depreciation 'added back' to operating profit in the indirect method of calculating operating cash flow?

Question:

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial and Management Accounting

ISBN: 978-1292086590

7th edition

Authors: Pauline Weetman

See More Books

Question Posted: Jan 25, 2018 01:34 AM

See More Questions

What is meant by the 'indirect method' of calculating operating cash flow?
The financial statements of P&G are presented in Appendix 5B or can be accessed at the books companion website, www.wiley.com/college/kieso. Refer to P&Gs financial statements and the accompanying...
The financial statements of P&G are presented in Appendix 5B or can be accessed at the books companion website, www.wiley.com/college/kieso. Instructions Refer to P&Gs financial statements and the...
Rainfall of magnitude 3.8cm and 2.8cm occurring on two consecutive 4-h durations on a catchment of area 27km produced the following hydrograph of flow at the outlet of the catchment. Estimate the...
A positive point charge 50 C is located in the plane xy at the point with radius vector r0 = 2i + 3j, where i and j are the unit vectors of the x and y axes. Find the vector of the electric field...
Rios Financial Co. is a regional insurance company that began operations on January 1, Year 1. The following transactions relate to trading securities acquired by Rios Financial Co., which has a...
Describe the Systems Development Life Cycle (SDLC). AppendixLO1
Callaway Concrete uses Economic Value Added as a financial performance measure. Callaway has $ 240 million in assets, and the firm has financed its assets with 37 percent equity and 63 percent debt...
The next dividend payment by Dizzie, Inc., will be $3.20 per share. The dividends are anticipated to maintain a growth rate of 3.25 percent, forever. if the stock currently sells for $50.00 per...
Marcus Laramore operates a proprietorship that sells sports memorabilia. It has been in operation for several years and has always used a taxation year that ends on December 31. Marcus business does...
What is meant by the 'direct method' of calculating operating cash flow?
What is the effect on cash flow of an increase in inventory levels?
The accounts below are from the general ledger of The Bast Company. For each letter given in the T-accounts, describe the type of business transaction(s) or event(s) that would most likely be...
Let f(x) = x+ 3, x20. The inverse of f is Of 1(x)=x - 3 (f (x) = -x-3 f-(x) = x - 3 Of 1(x) = 3 - x
Read the articles and please help me to write the whole assignment perfectly including the citations and references (APA Format). Pleaase choose the country and perspective of a particular industry....
A light, inextensible cord passes over a frictionless pulley as shown in figure below. One end of the rope is attached to a block, and a force P is applied to the other end. Block A weighs 600 lb and...
BASICOT POST DO NOT ASSIST DO NOT POST DO NOT ASSIST DO NOT POST DO NOT ASSIST For filming a physics demonstration about oscillation, an educational video crew attaches a large spring to a very small...
Day Mail Order Co. applied the high-low method of cost estimation to customer order data for the first 4 months of the year. What is the estimated variable order-filling cost component per order...
Increases in worker injuries and disability claims have prompted renewed interest in workplace design and regulation. As one particular aspect of this, employees required to do regular lifting should...
A survey of 70 college freshmen asked whether students planned to take biology, chemistry, or physics during their first year. Use the diagram to answer each question. How many of the surveyed...
Turn to the annual report of a listed company which you have used for activities throughout the previous chapters. Split the group to take two different roles: one half of the group should take the...
Turn to the annual report of a listed company which you have used for activities throughout the previous chapters. Split the group to take two different roles: one half of the group should take the...
Carry out a trend analysis on Safe and Sure plc, using the historical summary set out in Appendix I. Write a short report on the key features emerging from the trends.
Your company produces a health magazine. Its sales data for 1 - year subscriptions are as follows: Year of Operation Subscriptions Sold % Expired at Year End 2 0 2 0 $ 3 0 0 , 0 0 0 5 0 2 0 2 1 $ 6 4...
The adjusted trial balance for Tybalt Construction on December 3 1 of the current year follows. TYBALT CONSTRUCTION Adjusted Trial Balance December 3 1 Number Account Title Debit Credit 1 0 1 Cash $...
( US$ millions ) 1 2 / 3 1 / 2 0 1 4 1 2 / 3 1 / 2 0 1 3 1 2 / 3 1 / 2 0 1 2 1 2 / 3 1 / 2 0 1 1 Net income $ 1 4 , 4 3 1 $ 1 2 , 8 5 5 $ 1 0 , 7 7 3 $ 9 , 7 7 2 Depreciation 3 , 5 4 4 2 , 7 0 9 1 ,...

Why is depreciation 'added back' to operating profit in the indirect method of calculating operating cash flow?

Question:

Step by Step Answer:

In indirect method of calculate the cash flow generat...View the full answer

Financial and Management Accounting

Students also viewed these Managerial Accounting questions