DFS Cash Flow Statement
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Hi, quick question to all. At college we were using Operating Profit in the Reconciliation to net cash working. However, in the books Profit before tax is being used. Could you please let me know what you have been taught? Many thanks
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Re:DFS Cash Flow Statement
PBIT - profit before interest and tax... if you use PAIT - profit after interest and tax - you will end up deducting interest and tax twice...
Regards,
Robert0 -
Re:DFS Cash Flow Statement
Profit before interest and tax when used you will have to deduct interest and tax otherwise it will be twice done deduction.0 -
Re:DFS Cash Flow Statement
As far as i understand profit from operations is before tax and interest. We use the osbourne books and that is what is says in there.
Reconcillation of profit from operations to net cash flow from operating activities
Profit from Operations (profit before interest & TAx)
Adjustments for
ADD - Deperation for Year
ADD - Loss on Sale on non current assets / (or deduct gain)
Deduct - Investment income
Add - Decrease in inventories (Deduct increase)
Add - Decrease in Trade Receiables (Deduct increase)
Add - Increase in Trade Payables (Deduct decrease)
Equals - Cash (used in)/from operations
Deduct interest paid in period
Deduct tax paid on income in period
Equals Net Cash (used in)/from operating activities
This is then the first figure you use in the Cash Flow Statement - Net Cash (used in)/from operating activities.
Hope that helps
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Re:DFS Cash Flow Statement
As funny as this sounds, I've had to delete what I originally wrote here 'cos it was so stupid!
Must have been having a blonde moment!
Still, I've taken this space now and since I can't delete my post, I might as well use it...
Anyway, errrrrr.......... not long til Christmas now, eh? I still haven't seen that Coke lorry advert though - that's when Christmas really comes and not a moment before!
:oops: :oops: :oops:
Robert
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