Chapter 16, Problem 16E

To determine

Concept Introduction

Cash Flow Statement: Cash Flow Statement is the statement reflecting the flow of Cash & Cash Equivalents.

Cash: It includes Cash in Hand & Deposits with Bank.

Cash Equivalents: It includes those investments which are short term investment and highly liquid i.e. maturity period is of three months or less.

Operating Activities: Operating Activities are the principal revenue generating activities of enterprise. In other words activities that are not financing and investing activities.

Current Assets: Current Assets are the assets that are either in the form of Cash & Cash Equivalents or can be converted into Cash or Cash Equivalent within a short period of time i.e. 12 months.

Current Liabilities: Current Liabilities are the liabilities which are repayable in a short period of time i.e. 12 months.

Working Capital: Working Capital means excess of Current Assets over Current Liabilities.

It can be calculated as “Working Capital = Current Assets minus Current Liabilities”

To Prepare:

The Cash Flow from Operating Activities as on 31^st Dec 2015.