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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

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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

This problem has been solved

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