Statement of cash flow Flashcards
1
Q
Part 1
A
- profit before tax
2
Q
adjust for changes in working capital
A
- increase in receivables
- increase in payables
- increase in inventories
3
Q
Interest received
A
- then the company invest its money in other things and in return it gain interests
it is an investment
4
Q
cash generated from operation includes
A
- interest paid
- dividends paid
- taxation paid
5
Q
Cash flow from operating activities - 4 parts
A
- Part 1
- non cash items
- adjust for changes in working capital
- cash generated from operations
6
Q
Non cash items
A
- depreciation
- - P/L on the sale of NCA (sale - NRV)
7
Q
Cash generated from operations (indirect method)
A
- interest paid
- dividends paid
- tax paid during the year
8
Q
Cash from investing activities
A
- sale of NCA
- purchase of NCA
- interest received
- dividends received
- loan notes received
9
Q
Purchase of NCA
A
NCA balance in begin of year
-
Dep + sale + end of year NCA balance
=
Amount of NCA was purchased during the year
10
Q
Cash from financing activities
A
- issue of shares
(difference from begining of the year & end of year + difference in share premium - cash from proceeds
- bonus issue
11
Q
Net increase/decrease in cash
A
add the totals of the 3 parts
12
Q
Cash at the end of year
A
amount in net decrease/increase in cash + cash at the start of the year
13
Q
Cash generated from operations (direct method)
A
- cash received from customers
(revenue + op TR balance - cl TR balance - irrecoverable debts) - deduct - cash payments to suppliers
(first you find the purchases amount)
- cash paid to the employees
- other cash payments
(include expenses-depreciation-irrecoverable debts-employment costs+profit on disposal)
14
Q
Cash generated from operations (direct method)
A
- cash received from customers
- deduct - cash payments to suppliers
- cash paid to & on behalf of the employees
- other cash payments
15
Q
to find the amount purchases of NCA
A
Op balance
+ revaluation amount if increased
- dep charge
- disposal at carrying amount
