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Unformatted text preview: 2. Indirect: operating cfs are classified as adjustments to net income ABC INC CF STATEMENT Indirect format: 1. Start with net income 2. Remove all non cash components in calculating net income Removing non cash components: 1. Identify adjustments to net income. *non cash expenses (amort) add Gains on sale of LT assets: subtract Loss on sale of LT assets: add Gains and losses already accounted for in investing section 2. Identify changes in non cash working capital: current assets, liabilities except cash Increasing Decreasing Current Assets except cash-+ Current Liabilities +-Net income: Non cash expenses + Gain on sale of LT assets Losses on sale of LT assets+ EX JUSTIN INC....
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- Fall '07