Dear guys:
I am learning FRA and i have been stick at LOS 21.e (Kaplan Scheweser page 200:). This topic 's talking about how to disaggregate earning into their cash flow and accrual components. With the cash flow statement approach, they state that:
accruals = NI - CF0 - CFI (pages 201).
I got the point accrual (from operation activities) = NI - CFO, but why they also subtracted CFI from net income? There is possibility that accrual also exist in company’s Investing activities, but is it right when we using NI (investing activities are not include in the P/L statement)?
Your supports will be greatly appreciated. Hope you guy have great holidays and Merry xmas.