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FSA - Lec 6 - Lecture Example

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31 views4 pages

FSA - Lec 6 - Lecture Example

Uploaded by

ha6437674
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as XLSX, PDF, TXT or read online on Scribd
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CASH FLOWS STATEMENT - LECTURE EXAMPLE

Income Statements
For the year ended 31 Dec 20X3
20X3
Sales 22,833
Less: COGS 16,518
Gross Profit 6,315
Less: SGA Expenses 4,849
Less: Interest Expenses 459
Profit before tax 1,007
Less: Income Tax Expense 590
Net Income 417

Balance Sheet
For the year ended 31 Dec 20X3
20X2 20X3 Changes
Assets
Cash 430 475
Account Receivable 3,768 3,936 168
Inventories 2,334 2,966 632
Prepayments 116 270 154
Total Current Assets 6,648 7,647
Property, Plant and Equipment (net) 3,806 4,598
Intangible Assets 193 559
Total Assets 10,647 12,804

Liabilities & Shareholders' Equity


Account Payable 1,578 809 -769
Note Payables to bank 11 231 220
Wages & other expenses payable 1,076 777 -299
Total current liabilities 2,665 1,817
Long term debt 2,353 4,692 2,339
Deferred Income Taxes 126 89 -37
Total liabilities 5,144 6,598
Common Stocks 83 85 2
Preferred Stocks 0 289 289
Paid-in Capital - Preferred Stocks 4,385 4,392 7
Retained Earnings 1,035 1,440
Total Equity 5,503 6,206
Total Liabilities & Equity 10,647 12,804

Additional Information:
· Dividends on Preferred Stock: 12
· Depreciation Expense: 641
· Amortization Expense: 25
· No sale of PPE during the year
· Dividend paid is classified as Financing cash flows
· Interest received and paid, dividend received (if any) are classified as Operating cash flows
Statement of Cash Flows 20X3
Cash flows from Operating Activities
Net Income
Adjustment for non-cash items
Add: depreciation expense
Add: amortization expense
Adjustment for non-operating items
Loss (gain) from sales of non-current assets
Adjustment for deferred tax
(Increase) Decrease in Deferred Tax Asset
Increase (Decrease) in Deferred Tax Liability
Adjustments for working capital items
(Increase) Decrease in Account Receivable
(Increase) Decrease in Inventories
(Increase) Decrease in Prepayments
Increase (Decrease) in Account Payable
Increase (Decrease) in
Wages & Other Expenses payable
Net cash flows from Operating Activities (1) 0 CFO

Cash flows from Investing Activities


Acquisition of fixed assets
Sales of PPE
Net acquisition of intangible assets
(Purchase)/Sale of investments
Net cash flows from Investing Activities (2) 0 CFI

Cash flows from Financing Activities


Increase (Decrease) in short term borrowing
Increase (Decrease) in long-term borrowing
Issue of common stocks
Issue of preferred stocks
Repurchase of shares
Dividend Paid
Other
Net cash flows from Financing Activities (3) 0 CFF

Net change in cash (4) = (1)+(2)+(3) 0


Cash - opening balance (5)
Cash - ending balance (4)+(5)

assified as Operating cash flows


Step 1: Provide the format of SCF
Step 2: Fill in beginning and ending cash balances (from Balance Sheet), compute net change in cash = ending cash - beginning cash
Step 3: Fill in net income (from Income Ststement)
Step 4: Calculate the changes in working capital (from BS: current assets except cash, non-interest bearing current liabilities
Step 5: Calculate the changes in equity items
Changes in Common stock/Preferred stock/APIC. Increase indicates cash inflow and decrease indicates cash outflow und
Calculate the changes in treasury stock. Increase indicates cash outflow as company buybacks more share and decrease
Step 6: Calculate the changes
Step 7: Put in dividends in interest-bearing liabilities (both short term and long term). Increase/decrease indicates cash inflow
paid (outflow).
Dividends paid = Beginning RE + Net income – Ending RE
Step 8: Put in depreciation/amortisation exp. Depreciation/amortisation can be given or calculated
Step 9: Calculate the non-current assets acquired/sold (investing)
Fixed assets (net PPE): Ending FA = Beginning FA + Purchase – Sale – Depreciation exp
FA purchase = Ending FA – Beginning FA + Sale + Depreciation exp (if net PPE is provided)
End PPE (cost) = Beg PPE -cost + Purchase at cost – Cost of disposed PPE
End Accumulated dpereciation = Beg Accumulated depreciation + Depreciation exp
Intangible assets: Ending intangible = Beginning intangible + purchase – sale – Amortisation
Intangible purchase = Ending intangible – Beginning intangible + Sale + Amortisation
Step 10: Fill in non-cash items (depreciation, amortization, deferred tax, gain/loss, employee benefits)
Step 11: Calculate CFO, CFI, CFF and reconcile CFO+CFI+CFF with net change in cash
ding cash - beginning cash

g current liabilities

ndicates cash outflow under financing activities


more share and decrease indicates cash inflows as the company reissues treasury stock
ease indicates cash inflow/outflow

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