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PROFIT BREAKUP

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Guest (Querist)

15 July 2008 What is Operating Profit and Cash Profit ? How cash profit is calculated ?

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

15 July 2008 Operating Profit is the profit earned during a period from Operations Activities while cash profit is the profit from activities where cash has actually flown. Or in other words the it(Cash Profit) is the net profit arrived at before adjusting non cash charges like Depreciations, Provisions w.off, provision of taxes.

Guest

Guest (Querist)

15 July 2008 Ramesh you r right, but I have seen in Annual Report of Public Ltd. Co., they are not deduction Tax Provision to arrive at Cash profit. They only add Depreciation in PAT.

CA RAMESH KUMAR AHUJA

CA RAMESH KUMAR AHUJA (Expert)

15 July 2008 Taxes should be added back to arrive at Cash Profits. Otherwise, think How the deferred Tax or provision for taxes can effect the cash profit

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