As you know, the indirect method of presenting the operating cash flows starts either from net or operating profit. It’s not a direct outflow or inflow, but a change in balance.įirst off those changes reflect part of the cash flows only in combination with the profit. When using the indirect method for presenting your company’s cash flows for operating activities, one part of the statement also includes lines like “Changes in receivables and prepayments” and “Changes in payables and prepayments”.
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