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Sample Question Preview

Financial Statement Analysis

A company reports the following information: Net income of £500,000, depreciation expense of £80,000, increase in accounts receivable of £30,000, and decrease in inventory of £20,000. Using the indirect method, what is the company's cash flow from operating activities?

A. £570,000
B. £550,000
C. £570,000 ✓

Explanation:

Cash flow from operations = Net income + Depreciation - Increase in receivables + Decrease in inventory = £500,000 + £80,000 - £30,000 + £20,000 = £570,000

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Free CFA Questions FAQ

Are these really free CFA practice questions?

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Absolutely. Every free question includes the same detailed explanations as our paid content. We explain why the correct answer is right and why each incorrect option is wrong, referencing CFA curriculum concepts.

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Free questions cover all 10 CFA Level 1 topic areas: Ethics, Quantitative Methods, Economics, Financial Statement Analysis, Corporate Issuers, Equity Investments, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management.

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