Adjusted profit and loss method, Managerial Accounting

Under this method, approximated profit is calculated depends on transactions of the ensuing period. Afterward, decrease or increase in working capital is determined adjusting the estimated profit through cash inflows and cash outflows. This is like cash flow statement. Some banks in India use forms for calculating working capital in this method. A specimen of such a form is specified below.

Computation of Working Capital




Net Income


Add: (i) Non-cash Items


Working Capital Provided Operations

... ... ... ...

Add: (ii) Cash inflow Items


Less: Cash Outflow items


Net Changes in Working Capital


Posted Date: 4/9/2013 3:26:29 AM | Location : United States

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