Drop in operating cash flow

theoretically: If balance of current asset increases, cash flow from operations will decrease. If balance of current asset decreases, cash flow from operations will increase. If balance of a current liability increases, cash flow from operations will increase. If balance of a current liability decreases, cash flow from operations will decrease. Eg: When receivable increase due to poor collection in CY, it may result in increase in profit for the period, but decrease in operating cash flows. Also, early settlement of Current liabilities will result in decrease in operating cashflows.

CMA Bhaskar thanks for your reply - sorry couldn't reply earlier

Originally posted by : acca
	Hi all, can anyone please tell me general reasons behind drop in OPERATING CASH FLOW.... I am assuming this does not include investing and financing activities Its kind of urgent would appreciate a quick response. thanks in advance regards

1. Lower collections from customers

2.heavy payments to suppliers

3. heavy interset payments on short term borrowings.

4. heavy payments for various operating items buying.

5. lower realization on scrap/by product sales (if its part of  operating income)

6. heavy payments on account of salary & wages.

these are geenral reasons before extraordinary treatments.

 

 

Agree with both.