If a company's Net Income is 100,000, Depreciation is 20,000, and Inventory increased by 10,000, what is the Cash Flow from Operations (using the indirect method)?

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SSC Audit Tax Finance P-II QUESTION #6179

Question 1

If a company's Net Income is $100,000, Depreciation is $20,000, and Inventory increased by $10,000, what is the Cash Flow from Operations (using the indirect method)?

$90,000
$110,000✔️
$120,000
$130,000

Correct Answer Explanation

Net Income ($100k) + Depreciation ($20k) - Increase in Inventory ($10k) = $110,000. (Lesson 03).

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