Link Between Financial StatementsThe following information is available for a company. Income Statement (In ₹ million)Sales revenue2Operating expenses0.45 Operating profit 1.55 Interest expenses 0.22Taxes 0.28Net profit? Cash Flow Statement (In ₹ million)Cash in the beginning 0.75 Cash generated during the year?Cash at the end 1.52
Question
Link Between Financial StatementsThe following information is available for a company. Income Statement (In ₹ million)Sales revenue2Operating expenses0.45 Operating profit 1.55 Interest expenses 0.22Taxes 0.28Net profit? Cash Flow Statement (In ₹ million)Cash in the beginning 0.75 Cash generated during the year?Cash at the end 1.52
Solution
To calculate the net profit, we subtract the interest expenses and taxes from the operating profit.
Operating profit = ₹1.55 million Interest expenses = ₹0.22 million Taxes = ₹0.28 million
Net profit = Operating profit - Interest expenses - Taxes Net profit = ₹1.55 million - ₹0.22 million - ₹0.28 million Net profit = ₹1.05 million
To find the cash generated during the year, we subtract the cash in the beginning from the cash at the end.
Cash at the end = ₹1.52 million Cash in the beginning = ₹0.75 million
Cash generated during the year = Cash at the end - Cash in the beginning Cash generated during the year = ₹1.52 million - ₹0.75 million Cash generated during the year = ₹0.77 million
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