Depreciation

Because depreciation is non cash item so in case of cash flow we need cash items only . So net profit we have arrived only after deduction of depreciation so if we add back then it gets cancelled and only cash items will be remained

Thanusha Lakshmi

CA Final

★ 3K+

29-Sep-22 15:23

Because it's non cash expense..

Kiran Vijay

CA Final

★ 4K+

29-Sep-22 15:23

Thanks

Thread Starter

Abhishek Kambampati

CA Final

★ 0

29-Sep-22 15:25

Thank u

Thread Starter

Abhishek Kambampati

CA Final

★ 0

29-Sep-22 15:26

we are trying to find out the cash flow from operations with profit as a starting point. In order to find out the profit, we already deducted depreciation therefore because of depreciation my profit is decreasing but not my cash flow. in order to find out cash balance from profit, add back the depreciation, then profit would be turned into cash balance

SAKSHI SAIKUMAR NAIDU

CA Final

★ 0

27-Oct-22 13:48