Question

how do you calculate net change in non-cash working capital, cash provided in operating activities, cash used in investing activities and cash used in financing activities?

Answer 1

changes in working capital means that it is the diffrence of current assets (excluding cash) and current liabilities. For the use in cash flow statement change in working capital will calculated seperately each item of current asset and current liabilities i.e. accounts receivable,inventories,notes receivable, accounts payable, notes payable etc. Each item taken seperately and find the difference in two years of that item. For the cash flow purpose decrease in current asset and increase in current liabilities will added and increase in current asset and decrease in current liabilities will deduct from the Cash flow before working capital adjustments. Cash will not consider at the time of working capital adjustments.

Next one is that cash provided in operating activities. It is the section of cash flow statement explains the source and uses of cash from ongoing regular business activities in a given period. In a format basis we can say net income from the income statement, adjustment to net income and changes working capital.

Cash used or Cash flow from investing activities means that companies cash inflow and out flow from a companies long term investments. for example sale of investment, dividend from investment and purchase of investment.

Cash used in financing activities of Cash flow from financing activities means that the cash used for funding of the company. It will in both ways that Cash inflow and cash outflow. for example Issue of shares, Issue of debentures, Paid interest and dividends etc.