Once the values for these individual components have been calculated, these are summed together in the cash flow from operating section of a cash flow statement. ![]() ![]() The direct method works by directly calculating each of the components of operating cash flows, such as cash receipts from customers, cash paid to suppliers, cash paid for salaries, etc. Direct method of operating activities cash flows is one of the two main techniques that may be used to calculate the net cash flow from operating activities in a cash flow statement, the other being indirect method.
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