Increases in current liabilities are added to profit while decreases in current liabilities are subtracted from profit to derive the net cash flows.

Name: Increases in current liabilities are added to profit while decreases in current liabilities are subtracted from profit to derive the net cash flows.
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Question

Quizplus · Accepted Answer

Increases in current liabilities indicate that a company is deferring cash payments, thus increasing cash flow, while decreases indicate cash payments, reducing cash flow.

Increases in Current Liabilities Are Added to Profit While Decreases