The bottom-up approach to computing the operating cash flow applies only when:

Question

Quizplus · Accepted Answer

The bottom-up approach to computing the operating cash flow only applies when interest expenses are equal to zero. This is because the approach starts by calculating the cash inflows and then subtracting cash outflows, including operating expenses, to arrive at the operating cash flow. Interest expenses are not considered part of operating expenses and are therefore excluded in this approach.

The Bottom-Up Approach to Computing the Operating Cash Flow Applies