Which of the following is a correct adjustment to derive cash flow from the net income figure for a firm?

Name: Which of the following is a correct adjustment to derive cash flow from the net income figure for a firm?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

To derive cash flow from net income, you adjust for changes in working capital and non-cash expenses. An increase in inventory is subtracted because it represents cash that has been used to purchase more inventory, not yet resulting in cash outflows from sales.

Which of the Following Is a Correct Adjustment to Derive