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What is operating profit before working

Atharv Sankliya (1359 Points)

22 May 2022

what is operating profit before working capital changes

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4 Replies

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 22 May 2022

This is used in cashflows calculations if I rememeber. This means, before calculating operating profits, working capital changes will be included in this year (old value - new value)

yasaswi gomes (My grammar is 💯 good I) (7296 Points)
Replied 22 May 2022

If you are talking about cashflow statement, PBT is reconciled in the indirect method where no inventory, receivables, payables working capital changes are included. That means it is on the top heading reconciled with interest, tax payable and depreciation/amortisation charges etc. Till here it is called a Profit before working capital changes. Once you reconcile receivables, payables, inventory, it is called as net cashflows from operating activities (after working capital changes) Let me know if you need the cashflow format.