Menu
Cash flow
hi,
while making adjustment for working capital changes,
I'm a bit confused with inventory, when inventory decreases why should we add it to operating profit?
Replies (5)
because inventory is a part of operating activies.. as inventory is decreased that means we had selled it so profit will b increased..!!
But what if all sales are on credit
in that case ur debtors will also increases na... if stock decreases....!!! automatically effects will b there in both
Thank you sir.
Dear Prerana,
It represents Sale of Goods, which means increase in cash flow hence we add it to profits.
All the Best.
Regards,
QLI Success Oriented Coaching for CA and CS
www.qli.co.in
9029083303
Recent Threads
- GST RATE OF OUT DOOR CATERING
- Non resident taxation & income tax in India
- GST Rate for oral Hygiene Combo Pack
- GST registration - Address error
- TDS on property pu
- Import of goods IMS action related
- Incometax Survey - Updated Return Filing after the
- TCS under 206C(1F)
- Effect on Cost of Control when Bonus Issue is from
- The deductor filed GSTR 7 turnover including tax.I
Related Threads
CAclubindia
