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Cash Flow

08 April 2018

IF trade receivable show (7150) in change in working capital...
Is it mean decreasing or increasing in Trade receivable???

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10 Replies

CA Rashmi Gandhi (Chartered Accountant) (86308 Points)
Replied 08 April 2018

It is decrease in W.C.

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mallikharjun (Article Assistant) (30 Points)
Replied 08 April 2018

If The Amount Is In Negative Then That Means Debtors i.e Trade Receivables Has Increased.

So In Your Case Trade Receivables Has Increased

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Tech2abhi (174 Points)
Replied 08 April 2018

how??
when we Sale on credit our debtor increases,which leads To block of cash Hence negative cash balance...
In above question negative cash balance should lead to increase in debtor..
Is my explaination right??

Parminder Singh (744 Points)
Replied 08 April 2018

if debtors are shown negative in WC changes in cashcflow statements it means debtors have increased. if it shows negative in WC change only in question and not in cash flow statements it means debtors have decreased. please specify in your question

Tech2abhi (174 Points)
Replied 09 April 2018

negative debtors are in Change in working capital..
As per your explaination it should be increasing
but a question in practice manual shows that they are decreasing

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akhil yadav (student) (28 Points)
Replied 09 April 2018

working capital is current assets - current liabilities.. if assets decreases then working capital also decreases to that extent.. our assets value must always b greater than our liabilities indicating positive working capital.