The end of year balance of cash for the Foosball Company for 2012 was $10 million, and the end of year cash balance for 2013 was $12 million. If Foosball had cash flow for financing of $1 million and cash flow for investment of $3 million, its cash flow from operations is closest to:

Question

Quizplus · Accepted Answer

The cash flow from operations can be calculated by understanding the change in cash balance and adjusting for cash flows from financing and investment. The change in cash balance from 2012 to 2013 is $2 million ($12 million - $10 million). To find the cash flow from operations, add back the cash flows used for investment and financing: $2 million + $3 million (investment) + $1 million (financing) = $6 million.

The End of Year Balance of Cash for the Foosball