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                  74                                Corporate Finance                      BRILLIANT’S


                  III. Funds from Operations                  III. Am°naoe§g go ’§$S²>g
                      The  most  important  source  of  funds  is  ’§$S²>g H$m g~go ‘hÎdnyU© òmoV Am°naoe§g go ’§$S²>g
                  funds from operations. This is the only internal  h¡& ¶h ’§$S²>g H$m EH$‘mÌ Am§V[aH$ òmoV h¡& ¶h ’§$S²>g
                  source of funds. These funds come from the
                  daily business of the firm, i.e. the net profit of  g§ñWm Ho$ X¡{ZH$ ì¶mnma go AmVm h¡ AWm©V² g§ñWm H$m ZoQ>
                  the firm.                                   àm°{’$Q>&
                      The net profit from operations as shown     Am°naoe§g go ZoQ> àm°{’$Q> O¡gm g§ñWm Ho$ àm°{’$Q> VWm
                  in the profit and loss account of the firm contains  bm°g AH$mC§Q> go Xem©¶m J¶m h¡ Hw$N> Am¶Q>åg hmoVo h¢ Omo
                  certain  items  which do  not  affect  working  d{Hª$J H¡${nQ>b H$mo n«^m{dV Zht H$aVo h¢& Bg àH$ma C{MV
                  capital.  Thus  appropriate  adjustments  are
                  required to the figure of net profit to find out  g‘m¶moOZ Am°naoe§g go dmñV{dH$ ’§$S²>g kmV H$aZo Ho$
                  the real funds from operations.             {bE ZoQ> àm°{’$Q> H$m nVm bJmZo Ho$ {bE Amdí¶H$ h¢&
                      Following  are the  items to  be added  or  Am°naoe§g go ’§$S²>g Ho$ Am§H$‹S>m| na nhþ§MZo Ho$ {bE
                  subtracted  to  the  net  income  after  taxes  to  Q>¡³g Ho$ níMmV² ZoQ> B§H$‘ ‘| Omo‹S>o ¶m KQ>m¶o OmZo dmbo
                  arrive at the figure of funds from operation.  Am¶Q>åg h¢&

                                                     Particulars                               Amount
                                                       ({ddaU)                                  (am{e)
                                                                                                 (`)

                      Net Profit as Per Profit & Loss  A/c
                      àm°{’$Q> E§S> bm°g AH$mC§Q²>g Ho$ AZwgma ZoQ> àm°{’$Q>                     xxx

                      Add: Non-Cash items (Expenditure) / Zm°Z-H¡$e Am¶Q>åg (춶)
                       (i) Depreciation / S>o{à{gEeZ                                     xxx
                       (ii) Loss on sale of Fixed Assets / {’$³ñS> AgoQ²>g Ho$ {dH«$¶ na hm{Z  xxx
                       (iii) Capital expenditure / H¡${nQ>b E³gn|{S>Ma                   xxx
                           (Goodwill, Preliminary expenses, Written off)
                           (JwS>{db, {à{b{‘Zar E³gn|gog, [aQ>Z Am°’$)
                       (iv) Provision for income Tax (Proposed dividend)
                           B§H$‘ Q>¡³g Ho$ {bE àmdYmZ (àñVm{dV {S>{dS>|S>)               xxx
                       (v) Any other item / H$moB© Aݶ Am¶Q>‘                            xxx     xxx
                                                                                                 xxx
                      Less: Non-Cash Income / Zm°Z-H¡$e Am¶
                       (i) Profit on sale of Fixed Assets / {’$³ñS> AgoQ²>g Ho$ {dH«$¶ na bm^  xxx
                       (ii) Dividend Received / àmßV {S>{dS>|S>                          xxx

                       (iii) Any other item / H$moB© Aݶ Am¶Q>‘                          xxx     xxx
                                                          Profit from Operation (Am°naoeZ go bm^)  xxx
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