Describe the general relationship between net income and net cash flow

QUESTION

Describe the general relationship between net income and net cash flows from operating activitys for the firm, teh crosby firm. Intro to Finance chapter 2 week 1 q.28

In a cash flow statement cash flows from operating, investing and financing activities are shown in detail. Cash from operating activities is derived from various figures in the income statement. First the net income figure is extracted from the income statement and it is then adjusted for non cash and non operating expenses and incomes. Non-operating incomes like interest earned on investments are¦

deducted and non-operating expenses like interest expense on debentures are added back to the profit figure to get operating income. Then the non cash items like depreciation and amortization are adjusted so as to arive at the cash flows from operating activities.

ANSWER:

CLICK REQUEST FOR  AN EXPERT SOLUTION