Question

Ramakrishnan, Inc., reported 2021 net income of $20 million and depreciation of $3,550,000. The top part of Ramakrishnan, Inc.’s, 2021 and 2020 balance sheets is reproduced below (in millions of dollars):

	2021				2020				2021				2020
Current assets:								Current liabilities:
Cash and marketable securities	$	25			$	28		Accrued wages and taxes	$	44			$	37
Accounts receivable		100				94		Accounts payable		76				70
Inventory		170				148		Notes payable		70				65
Total	$	295			$	270		Total	$	190			$	172

Calculate the 2021 net cash flow from operating activities for Ramakrishnan, Inc.

Answer 1

Answer : Calculation of Net cash flow from operating activities for Ramakrishnan, Inc. :

Below is the table showing calculation :

Net Income	20,000,000
Add: Non Cash Items
Depreciation	3,550,000
Add/Less : Changes in Current assets & Current Liabilities
Increase in Accounts Receivable (94,000,000 -100,000,000)	-6,000,000
Increase in Inventory (148,000,0000 - 170,000,000)	-22,000,000
Increase in Accrued Wages (44,000,000 - 37,000,0000)	7,000,000
Increase in Accounts Payable (76,000,000 - 70,000,000)	6,000,000
Net Cash Flow from Operating Activity	8,550,000