Super Grocers, Inc., provided the following financial information for the quarter ending September 30, 2006:
Depreciation and amortization - $133,414
Net income - $341,463
Increase in receivables - $ 112,709
Increase in inventory - $81,336
Increase in accounts payables - $62,411
Decrease in marketable securities - $31,225
What is the cash flow from operating activities generated during this quarter by the firm?

Question

Quizplus · Accepted Answer

The cash flow from operating activities is calculated using the indirect method.

Starting with net income: $341,463

Add back non-cash expenses - depreciation and amortization: +$133,414

Adjustments for changes in working capital: 
Increase in receivables: -$112,709 
Increase in inventory: -$81,336 
Increase in accounts payables: +$62,411 
Decrease in marketable securities: +$31,225

Net cash flow from operating activities: $374,468