Use the following information to answer the next 3 questions:
Bad Brad's BBQ had cash flows for the year as follows ($ in millions):

-Bad Brad's would report net cash inflows (outflows)from operating activities in the amount of:
A)$(80).
B)$120.
C)$200.
D)$420.

Question

Use the following information to answer the next 3 questions:
Bad Brad's BBQ had cash flows for the year as follows ($ in millions):
 
-Bad Brad's would report net cash inflows (outflows)from operating activities in the amount of:
A)$(80). 
B)$120. 
C)$200. 
D)$420.

Quizplus · Accepted Answer

To calculate the net cash inflows (outflows) from operating activities, we need to start with the net income and make adjustments for non-cash items such as depreciation and changes in current assets and liabilities. Based on the information given, the net income for Bad Brad's BBQ is $100 million (total revenues of $600 million minus total expenses of $500 million). We then add back the $20 million in depreciation and subtract the increase in accounts receivable of $80 million (since an increase in AR represents a use of cash) to get a net cash inflow from operating activities of $120 million.

Use the Following Information to Answer the Next 3 Questions