Week 8 + 9 -> Statement of cash flows

Question 1

What is a Statement of Cash Flows?

Answer 1

A summary of a business’s cash inflows and outflows over a period of time

Question 2

What is the structure of the statement of cash flows?

Answer 2

Cash Flows from operating activities: X
Cash generated from operations: X
Cash flows from investing activities:
Purchase of non-current assets (X)
Proceeds from sale of NCAs X
Cash generated from investing activities: X
Cash flows from financing activities:
Proceeds from issue of shares X
Proceeds from issuing new debt X
Repayment of borrowing (X)
Payment of dividends (X)
Cash generate from financing activities: X
Net increase / (decrease) Cash: X
Cash and cash equivalents at
BEGINNING of period: X
Cash and cash equivalents at
BEGINNING of period: X

Question 3

What is the structure of Calculating operating cash flow?

Answer 3

Profit before tax: X
Adjustments for non-cash items
Depreciation X
Interest Expense X
Interest Income (X)
(Profit)/loss on sale of NCA (X)/X
Adj. Working Capital
(Increase)/Decrease inventories (X)/X
‘’ Trade receivables (X)/X
‘’ pre-payments (X)/X
Increase/(Decrease) trade payables X/(X)
‘’ Accruals X/(X)
Cash generated from operations X
Interest Paid (X)
Tax Paid (X)
Cash flow from operating activites X

Question 4

What is the formula to determine tax/interest paid?

Answer 4

Tax paid = (Opening tax payable + tax expenses) - tax payable

Interest paid = (opening interest payable + interest expenses) - interest payable

Question 5

In the adjustment for non-cash items in calculating operating expenses, when looking at profit / loss of sale on NCA, which is negative and positive?

Answer 5

(profit) / loss

Question 6

How can you see if new shares have been issued?

Answer 6

By looking at a change in equity