The cash outflows are subtracted from the cash inflows to calculate the net cash flow from operating activities, before the net cash from investing and financing activities are included to get the net cash increase or decrease in the company for that period of time.
Net cash from operating activities: $337,500
Income before income taxes: $700,000
Cash paid to vendors: (525,000)
Cash receipt from customers: $1,500,000
Cash Flow from Operations
Cash Flow from Operations = Net Income + Non-Cash Items + Changes in Working Capital.
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