In 2012,A Co.reported product sales revenue of $2,514.4 million and trade receivables of $319.9 million for 2012 and $269.0 million in 2011.What was the cash flow generated by sales?
A)$2,194.5 million
B)$2,463.5 million
C)$2,514.4 million
D)$2,565.3 million

Question

Quizplus · Accepted Answer

The cash flow generated by sales is calculated by adjusting the sales revenue for the change in trade receivables. The change in trade receivables is $319.9 million (2012) - $269.0 million (2011) = $50.9 million. Therefore, cash flow from sales is $2,514.4 million - $50.9 million = $2,463.5 million.