cash flow from operations investment & finance definition

Cash flow (net income plus depreciation expense, which is a non-cash charge, and deferred taxes) adjusted by increases in accounts receivable and accounts payable. Increases in accounts receivable are a use of cash if the company didn’t collect all of its sales or used cash to produce the increase. However, an increase in accounts payable or another current liability account means that the firm acquired some assets but hasn’t paid for them, which has the effect of boosting cash.