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Answer: 30%.
When a cash flow statement is presented using the indirect method, operating cash inflows and outflows are not separately disclosed. Instead, the common-size cash flow statement displays the net operating cash flow (either provided by or used in operating activities) as a percentage of total cash inflows or outflows, depending on whether the net amount represents a cash inflow or outflow. In this case, the net operating cash flow is an outflow (€750 million). Therefore, it should be calculated as a percentage of total cash outflows (€2,500 million): 750 / 2,500 = 30%. - **Option B (50%)** is incorrect because it divides the net operating cash outflow by total cash inflows (750 / 1,500), which is not the appropriate basis for a net outflow. - **Option C (75%)** is incorrect because it divides the net operating cash outflow by the net decrease in cash (750 / 1,000), which is not relevant for common-size analysis.
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An analyst gathers the following information (in € millions) about a company: Net cash flow from operating activities (750) Total cash inflows 1,500 Total cash outflows 2,500 Net increase (decrease) in cash (1,000) On a common-size statement of cash flows presented using the indirect method, net operating cash flow is:
A
30%.
B
50%.
C
75%.