OPERATING ACTIVITIES



OPERATING ACTIVITIES
Cash flow arising from operating activities is a key indicator of the extent to which the business operations of the enterprise have generated cash. It indicates whether adequate cash is generated to maintain the Business Operations, Pay dividends, repay loans and make new investments. It is also helpful in forecasting future cash flow from operations.

Operating Activities are the Principal Revenue Producing Activities of the Enterprise and other activities that are not INVESTING  or FINANCING activities.

Thus, cash flow from Operating Activities arises from Principal Revenue Producing Activities of the Enterprise the determine the net profit or loss.



Few examples of operating Activities  

1. Cash Sales

2. Cash Purchases

3. Rent paid

4. Income Tax paid

5. office Expenses

6. Sale of Machines by a Machine Dealer

7. Cash Paid against Trade Payables

8. Income Tax Refund Received

9.Cash Received from Debtors

10. Commission Paid
 
11. Employee Benefit Expenses

12. Preliminary Expenses



 

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