Question

Suppose Torche Corporation has the following results related to cash flows for 2017: Net Income of $10,000,000 Increase in Accounts Payable of $800,000 Increase in Accounts Receivable of $600,000 Depreciation of $1,600,000 Decrease in Inventory of $100,000 Other Adjustments from Operating Activities of $1,000,000 Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands. What is the Net Cash Flow from Operating Activities? Please specify your answer in the same units as the statement of cash flows.

Answer 1

Torche Corporation
Cash Flow Statement
Fo rthe year ended December 31 2017
($ in Thousands)
A. Cash Flows from Operating Activity
Net Income		$      10,000.00
Adjustments to reconcile net income to net cash flows from operating activities
Depreciation expense	$        1,600.00
Change in Current operating Assets and Liabilities
Increase in Accounts receivables	$          (600.00)
Increase in Accounts Payable	$            800.00
Decrease in Inventory	$            100.00
		$        1,900.00
Net cash flow from Operating activities		$      11,900.00
B. Cash flows from Investing Activities
C. Cash Flows from Financing activities
Net Increase (Decrease) in Cash [A+B+C]		$      11,900.00
Cash at the beginning of the period
Cash at the end of the period		$      11,900.00

Net cash flow from Operating Activities = $11,900.                                                ($ in Thousands)

General notes for cash flow

Cash is increased when Current liability increase or Current asset Decrease.

Cash is Decreased when Current liability Decrease or Current asset Increase.

Depreciation or loss on sale of any asset is a non cash expense hence it will be added to net income to get operating cash