State whether the following are true or false. If false, explain why:

(a) Depreciation and profit from sale of property, plant and equipment are both non-cash flow items and must be added back to operating profit to arrive at operating cash flow.

(b) Inventory, trade receivables and property, plant and equipment are all items of working capital.

(c) Decreases in current assets such as inventory, trade receivables and prepayments must be added back to profi t to arrive at cash fl ow.

(d) We need to adjust profi t before taxation for non-operating items (such as interest paid or received) to arrive at operating profi t for non-listed companies.

(e) The indirect method preparing the statement of cash flows is seldom used by large companies.