Cash flow from operating activities: The operating activities are the revenue generating activities of the business. The cash flow related to these activities are cash received from customers, cash paid for inventory, cash paid for other expenses, cash paid for income taxes etc. When cash receipts and cash payments are used for calculating cash flow from operating activities, this method is termed as direct method. When adjustments like depreciation expenses, increase or decrease in current assets or current liabilities are added or deducted to net income and cash flow from operating activities is calculated, it is termed as indirect method. To determine: CRUZ, INC.’s cash flow from operating activities

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Chapter 16, Problem 11QS

To determine

Concept Introduction:

Cash flow from operating activities:

The operating activities are the revenue generating activities of the business. The cash flow related to these activities are cash received from customers, cash paid for inventory, cash paid for other expenses, cash paid for income taxes etc. When cash receipts and cash payments are used for calculating cash flow from operating activities, this method is termed as direct method.
When adjustments like depreciation expenses, increase or decrease in current assets or current liabilities are added or deducted to net income and cash flow from operating activities is calculated, it is termed as indirect method.

To determine:

CRUZ, INC.’s cash flow from operating activities

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