Assume the following information from the financial statements of ReStateM Company:
Net income $10,000
Depreciation expense $3,000
Salaries expense $5,000
Increase in net working capital $9,000
Capital expenditures $4,000
The cash flow from operations for ReStateM is:
A)$22,000
B)-$22,000
C)$4,000
D)-$4,000

Question

Quizplus · Accepted Answer

Cash flow from operations can be calculated by starting with net income, then adding back non-cash expenses (like depreciation) and adjusting for changes in working capital. Here, it's $10,000 (net income) + $3,000 (depreciation) - $9,000 (increase in net working capital) = $4,000.

Assume the Following Information from the Financial Statements of ReStateM