Week 7 - Cash Flow Statement

Question 1

NBV PPE beginning was 150, closing NBV was 250. There was a disposal whose NBV was 40, sold for a gain of 10, and depreciation expense was 13. what is the cash outflow from investing?

Answer 1

NBV start - Dep + CapEx - Disp = NBV End

150-13-40+CapEx = 250
Capex = 153 but also 10 gain from disposal so net cash outflow is 143

Question 2

what are the two formats for the cfs

Answer 2

direct and indirect method (ONLY APPLIES TO OPERATING ACTIVITIES)

Question 3

How is LSE CFS different to how it usually is

Answer 3

cash flow from operations uses pre tax income top line, add back interest expense and then you find cash generated from operating activities, then minus interest paid and income taxes paid

Question 4

How to calculate interest paid

Answer 4

opening interest liability + interest expense (from IS) - closing interest liability

Question 5

How to calculate income taxes paid

Answer 5

opening taxation liability + tax expense (from IS) - closing taxation liability

Question 6

How do you adjust for working capital changes on CFS

Answer 6

current assets increasing = cash outflow
current asset decreasing = cash outflow

current liabilities (related to operations) increasing = cash inflow
current liabilities decreasing = cash outflow

Question 7

what is everything u adjust for in CFO

Answer 7

+ non cash items, -/+non operating cash flows (P/L on disposal), working capital changes

Question 8

how to calculate capex usng starting and ending balance

Answer 8

NBV opening - depreciation-disposals NBV + CapEx = NBV closing

Question 9

how to calculate proceeds from issue of share capital

Answer 9

closing balance (par value + premium) - opening balance

Question 10

how to calculate proceeds from long term borrowings

Answer 10

closing balance - opening balance