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Profit during the year ₹20000, during the year, there was increase in stock ₹9000, and decrease in debtors₹5000.what is a amount of cash from operating activities?
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Profit during the year ₹20000, during the year, there was increase in ...
Amount of Cash from Operating Activities:

To determine the amount of cash from operating activities, we need to analyze the changes in the profit, stock, and debtors during the year.

1. Profit:
Profit during the year is given as ₹20,000. Profit is the excess of revenue over expenses and represents the core operating activities of a business. It includes the cash inflow from sales and other operating income, and the cash outflow for various expenses.

2. Increase in Stock:
There was an increase in stock by ₹9,000. An increase in stock represents a cash outflow as it involves the purchase of additional inventory. The cash outflow is deducted from the profit to calculate the cash generated from operating activities.

3. Decrease in Debtors:
There was a decrease in debtors by ₹5,000. A decrease in debtors represents a cash inflow as it indicates that the company has collected cash from its customers for the outstanding accounts receivable. The cash inflow is added to the profit to calculate the cash generated from operating activities.

Calculation:
To calculate the amount of cash from operating activities, we use the following formula:

Cash from Operating Activities = Profit + Non-cash Expenses - Non-cash incomes + Increase in Current Liabilities - Decrease in Current Assets

In this case, we have the profit, increase in stock, and decrease in debtors. Since there is no information given about non-cash expenses or incomes, we assume they are zero. Additionally, there is no information provided about the increase in current liabilities or decrease in current assets.

Final Answer:
Therefore, based on the available information, the amount of cash from operating activities can be calculated as follows:

Cash from Operating Activities = Profit + Increase in Debtors - Increase in Stock
Cash from Operating Activities = ₹20,000 + (-₹5,000) - ₹9,000
Cash from Operating Activities = ₹6,000

Hence, the amount of cash from operating activities is ₹6,000.
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Profit during the year ₹20000, during the year, there was increase in stock ₹9000, and decrease in debtors₹5000.what is a amount of cash from operating activities?
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