CUET UG 2023 — Accountancy Financial Statements

Net Profit $= 10{,}000$=10,000. Add back non-cash and non-operating: Depreciation $2{,}000$2,000 + General Reserve $3{,}000$3,000 + Goodwill $700$700 $-$− Profit on sale $300$300 $= 15{,}400$=15,400 operating profit before working capital changes. Adjust working capital: $- 300$−300 (debtors) $+ 600$+600 (creditors) $- 20$−20 (prepaid) $- 200$−200 (outstanding) $= 15{,}480$=15,480.