Ewan Ltd makes an operating profit of £37000 in its financial year ended 31 December 20X1, after charging £15 800 in depreciation for the year The business's net change in working capital (stock, debtors and creditors) was a cash outflow of £3500. What was the net cash inflow from operating activities for the year ended 31 December 20X1?

Question

Quizplus · Accepted Answer

The net cash inflow from operating activities is calculated by adding back the non-cash expense (depreciation) to the operating profit and then adjusting for the change in working capital. Therefore, £37,000 (operating profit) + £15,800 (depreciation) - £3,500 (net change in working capital) = £39,300.

Ewan Ltd Makes an Operating Profit of £37000 in Its