The Indirect Method of Calculation of the Cash Flow from Operations

question 14

Multiple Choice

The indirect method of calculation of the cash flow from operations consists of the following steps

• A) Start with reported profit after taxes and add-back depreciation allowance for the period.
• B) Start with reported profit after taxes,add-back accumulated depreciation,add-back non-cash costs and adjust for the variations of balances of accounts receivable,accounts payable and inventories between the beginning and the closing of the period.
• C) Start with reported profit after taxes,add-back depreciation allowance,add-back non-cash costs and adjust for the variations of balances of accounts receivable,accounts payable and inventories between the beginning and the closing of the period.
• D) Start with reported profit after taxes,add-back depreciation allowance,add-back interest expenses net of tax shield,and adjust for the variations of balances of accounts receivable,accounts payable and inventories between the beginning and the closing of the period.

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Definitions:

Symbol

A graphical element used on drawings or in documentation to represent a specific concept, operation, or component without the need for textual explanation.

Squareness

The degree to which two surfaces or lines form a perfect 90-degree angle, indicating precision and alignment.

Roundness

A geometric tolerance that limits the amount by which the surface of a part can deviate from a perfect circle.

Flatness

A geometric tolerance that specifies the maximum allowable deviation of a surface from being perfectly flat.