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CFA Level 1
Financial Reporting and Analysis

Impact of Working Capital Changes on Cash Flows from Operating Activities

Very Hard Financial Statements Cash Flow Statement

ABC Limited is preparing its cash flow statement for the year ended December 31, 2023. During the year, the company recognized a decrease in accounts receivable of $50,000 and an increase in accounts payable of $30,000. Additionally, ABC Limited reported a net income of $200,000 and had non-cash depreciation expenses of $20,000. Based on this information, what is the impact on the cash flows from operating activities when prepared using the indirect method?

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