Question

Usher Sports Shop had cash flows from investing activities of −$4,454,000 and cash flows from financing activities of −$5,925,000. The balance in the firm’s cash account was $1,624,000 at the beginning of the year and $1,760,000 at year-end. Calculate Usher Sports Shop’s cash flow from operations.

Answer 1

To calculate Usher Sports Shop's cash flow from operations, we need to subtract the cash flows from investing activities and cash flows from financing activities from the change in cash balance.

Change in cash balance = $1,760,000 - $1,624,000 = $136,000

Cash flow from operations = Change in cash balance - Cash flows from investing activities - Cash flows from financing activities

= $136,000 - (-$4,454,000) - (-$5,925,000)

= $136,000 + $4,454,000 - $5,925,000

= -$1,335,000

Therefore, Usher Sports Shop's cash flow from operations is -$1,335,000.