Cash Flow from Operations

[cfachamp101]

Could someone explain this question? I can’t seem to understand…
Pacific, Inc.’s financial information includes the following, with “change” referring to the difference from the prior year (in $ millions):
Net Income
27
Change in Accounts Receivable
+4
Change in Accounts Payable
+1
Change in Inventory
+5
Loss on sale of equipment
-8
Gain on sale of real estate
+4
Change in Retained Earnings
+21
Dividends declared and paid
+4
Pacific, Inc.’s cash flow from operations (CFO) in millions was:

 

[studyguy18]

Indirect method of calculating CFO. Is your question around how to account for each of the non-cash and non-operating line items?

 

[josh_16]

Which part of it do you not understand? or is it all of it?

 

[Harrogath]

CFO = Net income - increase in accounts receivable + increase in accounts payable - increase in inventory + loss on sale of equipment - gain on sale of real estate.
Note that I’m assuming the loss and gain in the sale of assets in this exercise are already adjusted for taxes (after-tax amounts).
CFO = 27 - 4 + 1 - 5 + 8 - 4 = 23

 

[olajideanuoluwa001]

Yea, Harrogath got it right..