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Why?
How much cash has been generated from normal business operating
activities/operations of a company?
What have been the other premier financing activities of the firm through
which cash has been raised? What has happened to cash so obtained?
How
was the
accomplished?
Have
redemption
of
preference
shares
and
debentures
Why?
What has been the proportion of debt and equity for cash
raised from outside?
5-5
Rs 10,000
Rs 7,000
Rs 3,000
Rs 1,800
Rs 1,200
5-6
Net Profit
expenditure depreciation
5-7
5-8
Year 1
Total
Year 2
Cash
Credit
Total
Cash
Credit
Sales
Less:Purchase
80,000.00
Net profit
20,000
40,000
40,000.00
Year 1
Year 2
Total
Total
Sales
Less:Purchase
Net profit
100,000.00
150,000.00
80,000.00
110,000.00
20,000
40,000
5 - 10
SUMMARY OF
Operating Activities:
Operating cashflows are directly related to production and sales of
the firms products/services.
Investment Activities:
Investment flows are cashflows associated with purchase/sale of
both fixed assets and business interests.
Financial Activities:
Financing flows are cashflows that result from debt/equity
financing transactions and include incurrence and repayment of
debt cashflows from the sale of shares and cash outflows to
purchase shares or pay dividend.
5 - 12
OPERATING ACTIVITIES
Cash flow From Operating Activities
o
o
o
o
o
o
xxxxx
5 - 13
INVESTING ACTIVITIES
Cash flow From Investing Activities
Purchase of fixed assets
Proceeds from sale of equipments
Interest received
Dividends received
Net cash from investing activities
xxxxx
xxxxx
xxxxx
xxxxx
xxxxx
5 - 14
FINANCING ACTIVITIES
Cashf low From Financing Activities
5 - 15
METHODS OF PREPARATION OF
CASH FLOW STATEMENT
Direct Method Cash Flow Statement
Indirect Method Cash Flow Statement AS3
5 - 16
to
1984
-1429
Operating Ex -455
Income Tax paid
-72 28
Purchase of Machinery
Purchase of Patent
-75
-16
-85
-14
210
20
-37
74
-3
23
Interest on debenture
14
40
CA/CL Adjustments
Decrease in Sundry Debtors
Decrease in Inventories
7
35
16
-72
28
CONTINUED
Cash from Investing Activities
Machinery Sold
Purchase of Machinery
Purchase of Patent
-75
-16 -85
-14
210 20
-37
-28,800
1,44,000
Proposed dividend
1,74,000
Depreciation
4,08,000
7,69,200
4,20,000
Loss on Sale of FA
36,000
12,000
48,000
12,99,600
CONTINUED
Increase in current assets (12,72,000-11,62,800)
Increase in current liabilities
Tax Paid
48,000
-4,32,000
8,06,400
-10,20,000
Sale of FA
1,20,000
Sale of Investment
1,44,000
-7,56,000
4,80,000
-3,02,400
-1,26,000
51,600
-1,09,200
CONTINUED
Net cash inflow
1,02,000
2,10,000
3,12,000