Cash Flow Indirect Method

●      Two Balance Sheet requires.

●      No need of Profit & Loss account in Indirect Method.

●      Non Cash Item require.

●      We need change in current Assets & Current Liabilities account.

●      No need to open, Opening current assets and current Liabilities accounts.


(Indirect Method): Given by AS-3

M/s XYZ LIMITEDCash flow Statement for the year ended 31 March 2014
Cash Flows from Operating Activities (Schedule- 1)XX
Cash Flows from Investing Activities (Schedule- 2)XX
Cash Flows from Financing Activities (Schedule-3)XX
Extraordinary ItemsXX
Net Profit before Tax →XX
Income Tax Paid →XX
Net Increase or Decrease in cash or cash Equivalents →XX
Add: Cash & Cash Equivalents at the beginning of the period →XX
Cash and Cash Equivalents at the end of the period →XXX


Cash flow from operating activities

Changes in Profit & Loss accountXX
Changes in Reserve (Any)XX
(+) Interim DividendXX
Net Profit →XXX
Non Cash Items: 
(+) DepreciationXX
(+) Loss on Sale of Fixed AssetsXX
(+) Goodwill AmortizationXX
(+) Preliminary Expenses written offXX
Non Cash Incomes: 
(-) Gain on Sale of Fixed AssetsXX
Operating Profit before working Capital changes →XXX
± Changes in Current Assets & Current liabilitiesXX
Cash operating Expenses before Tax——
Tax PaidXXX
Cash Flow from Operating Activities →——


Cash flow from investing activities

Particulars Amount
Cash received for:  
– Sale of Fixed AssetsXX 
– Sale of InvestmentXX 
– Interest receivedXX 
– Dividend receivedXXXXX
Cash paid for:  
– Purchase of Fixed AssetsXX 
– Purchase of InvestmentsXXXX
Net Cash Flow from Investing Activities → XX


Cash flow from financing activity

Particulars Amount
Cash received for:  
– Issue of Equity SharesXX 
– Issue of Preference ShareXX 
– Long-term borrowingsXXXXX
Cash paid for:  
– Interest paidXX 
– Redemption of Preference sharesXX 
– Repayment of LoansXX 
– Dividend paidXX 
– Purchase of InvestmentsXXXX
Net Cash Flow from Financing Activities → XX

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