Outline 3 Reasons Why Net Profit May Differ from Operating

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The Answer is Some expenses,such as depreciation and doubtful debts,are non-cash expenses.
Accrual accounting involves balance day adjustments,for items such as prepaid expenses and accrued revenues,which create timing differences between the receipt or payment of the cash flow,and the recognition of the related income or expenses.
Net profit includes gains or losses on the sale of non-current assets such as land,buildings,plant and equipment;sales of such assets are not recorded in the Operating section of the Cash Flow Statement,but in the Investing section.

Outline 3 Reasons Why Net Profit May Differ from Operating

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