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Explanation: Cash Flow from Operating Activities (CFO) is a measure that shows the cash generated or used by a company’s core operating activities. Adjustments to Cash Flow from Operating Activities (CFO) from EBT (Earnings Before Taxes) to CFO represent changes made to the reported earnings before taxes figure to derive the actual cash flow generated or used in a company’s core operating activities. These adjustments are made to reconcile the company’s accounting earnings with its cash flows, taking into account non-cash items and other factors affecting cash flow.
Example: Example: TCS had adjustments to CFO of 2241 crore, indicating that certain changes were made to the EBT to align it more closely with the company’s actual cash generation from its core business operations. These adjustments could include items such as non-cash expenses like depreciation and amortization, and other factors that affect the cash flow statement’s accuracy. By making these adjustments, TCS provides investors with a clearer picture of its cash flow from operating activities, which is essential for assessing the company’s financial health and performance.
You can view the Adjustments for any company on Radar under Cash from Operations in the Cash Flow section.