Maybe stupid question, but I can't figure it out
Stuck on Financial Reporting, my weakest link.
If we have an increase in for example accounts reciavables between two years, all else equal that means that we record a negative cash flow on the income statement if I have understood it correctly?
Simillary then if Inventory increase we will have an negative cash flow, since we bind up cash.
But if we have a write-down on Inventory, shouldn’t that then mean a positive cash flow following the same logic, but it doesn’t right, its a negative cash flow as well?
Can someone make this a bit more clear for me, what are all the effects on BS, I/S, Cash Flow Statement?