Cash Flow from Operating Activities is calculated as: \[ \text{Net Profit Before Tax and Extraordinary Items} = 6,28,000 + 1,50,000 (\text{Provision for Tax}) = 7,78,000 \] Adjustments for non-cash and non-operating items: \[ \text{Add: Depreciation} = 1,40,000 \] \[ \text{Add: Loss on Sale of Machinery} = 30,000 \] \[ \text{Less: Gain on Sale of Investments} = (20,000) \] \[ \text{Operating Profit Before Working Capital Changes} = 7,78,000 + 1,40,000 + 30,000 - 20,000 = 9,28,000 \] Adjustments for working capital changes: \[ \text{Add: Increase in Current Liabilities} = 1,61,000 \] \[ \text{Less: Increase in Current Assets} = (6,00,000) \] \[ \text{Less: Decrease in Current Liabilities} = (64,000) \] \[ \text{Cash Generated from Operations} = 9,28,000 + 1,61,000 - 6,00,000 - 64,000 = 4,25,000 \] Adjustments for taxes and dividends: \[ \text{Less: Income Tax Paid} = (1,18,000) \]
Net Cash Flow from Operating Activities = 4,25,000 - 1,18,000 = 3,07,000
Final Answer: Cash Flows from Operating Activities = 3,07,000