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Drop in operating cash flow

acca (xyz) (59 Points)

26 August 2012

Hi all, can anyone please tell me general reasons behind drop in OPERATING CASH FLOW.... I am assuming this does not include investing and financing activities

Its kind of urgent would appreciate a quick response. thanks in advance

regards

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Bhaskar Unnikrishnan CPA CMA (Accounts / Administration) (414 Points)
Replied 26 August 2012

theoretically: If balance of current asset increases, cash flow from operations will decrease. If balance of current asset decreases, cash flow from operations will increase. If balance of a current liability increases, cash flow from operations will increase. If balance of a current liability decreases, cash flow from operations will decrease. Eg: When receivable increase due to poor collection in CY, it may result in increase in profit for the period, but decrease in operating cash flows. Also, early settlement of Current liabilities will result in decrease in operating cashflows.

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acca (xyz) (59 Points)
Replied 26 September 2012

CMA Bhaskar thanks for your reply - sorry couldn't reply earlier

CA Lokesh Pokharna (CA (Ahmedabad Bhilwara Chittorgarh)) (4128 Points)
Replied 26 September 2012

Originally posted by : acca
	Hi all, can anyone please tell me general reasons behind drop in OPERATING CASH FLOW.... I am assuming this does not include investing and financing activities Its kind of urgent would appreciate a quick response. thanks in advance regards