For many companies,cash flow from operating activities exceeds income from operations,due to the effect of depreciation,which decreases income from operations but does not decrease cash.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense that is added back to the income statement for calculating cash flow from operations. Therefore, cash flow from operating activities can exceed income from operations when depreciation is added back.

For Many Companies,cash Flow from Operating Activities Exceeds Income from Operations,due