What are the reasons for a firm having lower cash from operations than working capital from operations?
What are the possible interpretations of these reasons?© BrainMass Inc. brainmass.com April 3, 2020, 5:08 pm ad1c9bdddf
Cash from Operations and Working Capital from Operations
Cash from Operations:
Cash generated as a result of operations carried out during the normal course of business is known as cash from operations. In other words, it is the flow of cash due to operating activities. It is calculated by making necessary adjustments in the working capital. In working capital calculations, there is treatment of outstanding and prepaid expenses and income. While computing cash from operations, each and every item of profit and loss account is altered according to the cash approach. It also alters the effect of ...
The reasons for a firm having lower cash from operations than working capital from operations are determined. The possible interpretations of these reasons are provided.