Cash Flow
Balance Sheet
|
Liabilities
|
|
Assets
|
|
|
Share Capital
|
300
|
Fixed Assets
|
750
|
|
Reserves
|
200
|
|
|
|
Long - Term Loans
|
400
|
Current Assets
|
300
|
|
Current Liabilities
|
150
|
|
|
| |
1,050
|
|
1,050
|
Balance Sheet
|
Previous Year
|
Liabilities
|
Current Year
|
|
100
|
Share Capital
|
300
|
|
75
|
Reserves & Surpluses
|
200
|
|
500
|
Long-Term Loans
|
400
|
|
100
|
Current Liabilities
|
150
|
|
775
|
|
1,050
|
Balance Sheet
|
Previous Year
|
Assets
|
Current Year
|
|
600
|
Fixed Assets
|
750
|
|
175
|
Current Assets
|
300
|
|
775
|
|
1,050
|
Statement Showing Changes in Working Capital
| |
Previous Year
|
Current Year
|
|
Current Assets
|
175
|
300
|
|
(-) Current Liabilities
|
100
|
150
|
|
= Net Working Capital
|
75
|
150
|
|
Increase in Working Capital
|
75
|
|
Funds - Flow Statement
|
Sources
|
|
Uses
|
|
|
Shares Issued
|
200
|
Loans repaid
|
100
|
|
Retained Profit
|
125
|
Fixed Assets Purchased
|
150
|
| |
|
Increase in Working Capital
|
75
|
| |
325
|
|
325
|
|
Cash Flow Statement
|
|
Particular
|
Rs
|
Rs.
|
Particular
|
Rs
|
Rs
|
|
(A) Cash Flow from Operating Activities
|
|
|
(B) Cash Flow from Investing Activities
|
|
|
|
Net Profit before Interest & Tax
|
|
|
Purchase of Fixed Assets / Inventory
|
|
|
|
Adjustment for
|
|
|
Sale of Fixed Assets / Inventory
|
|
|
|
Depreciation
|
|
|
Dividend Received
|
|
|
|
Goodwill written off
|
|
|
Interest Received
|
|
|
|
Preliminary Expenses written off
|
|
|
Rent Received
|
|
|
|
Underwriting commission
|
|
|
|
|
|
|
Cost of Issue of Debentures
|
|
|
(C) Cash Flow from Financing Activities
|
|
|
|
Loss on Fixed Assets
|
|
|
Issue of Shares / Debentures
|
|
|
|
Profit on Fixed Assets
|
|
|
Loan Disbursement
|
|
|
|
Operating cash before Working Capital Changes
|
|
|
Payment of Preference Shares / Debentures
|
|
|
| |
|
|
Loan Paid
|
|
|
|
Increase in Current Assets
|
|
|
Interest Paid
|
|
|
|
Decrease in Current Assets
|
|
|
Dividend Paid
|
|
|
|
Increase in Current Liabilities
|
|
|
|
|
|
|
Decrease in Current Liabilities
|
|
|
Net Balance in Cash & Cash Equivalent
|
|
|
|
Cash Flow from Working Capital
|
|
|
Opening Balance in Cash & Cash Equivalent
|
|
|
|
Net cash flow from Operating Activities
|
|
|
Closing Balance in Cash & Cash Equivalent
|
|
|
|
Tax
|
|
|
|
|
|
| |
|
|
|
|
|
|
Trading and Profit & Loss Account
|
|
COGS
|
60000
|
Sale
|
100000
|
|
Gross Profit
|
40000
|
|
|
|
TOTAL
|
100000
|
|
100000
|
| |
|
Gross Profit
|
40000
|
|
Wages
|
5000
|
|
|
|
Power
|
5000
|
|
|
|
Insurance
|
5000
|
|
|
|
Depreciation
|
5000
|
|
|
|
Net Profit
|
20000
|
|
|
| |
|
|
|
|
TOTAL
|
40000
|
|
40000
|
Cash flow from Operating Activities
|
DIRECT METHOD
|
|
Sales
|
|
100000
|
|
|
COGS
|
60000
|
|
|
|
Wages
|
5000
|
|
|
|
Power
|
5000
|
|
|
|
Insurance
|
5000
|
|
|
|
Net Cash Flow
|
|
|
25000
|
Cash flow from Operating Activities
|
INDIRECT METHOD
|
|
Net Profit
|
|
20000
|
|
|
Depreciation
|
|
5000
|
|
|
Net Cash Flow
|
|
|
25000
|
Prepare Cash Flow Statement
|
Liabilities
|
2021
|
2022
|
Assets
|
2021
|
2022
|
|
Share Capital
|
120,000
|
200,000
|
Machinery at cost
|
210,000
|
250,000
|
|
Prov for Depreciation
|
92,000
|
95,000
|
Debtors
|
93,000
|
81,000
|
|
Profit & Loss Account
|
60,000
|
75,000
|
Stock
|
80,000
|
130,000
|
|
Debentures
|
80,000
|
70,000
|
Preliminary Expenses
|
5,000
|
4,000
|
|
Creditors
|
48,000
|
40,000
|
Bank Balance
|
12,000
|
15,000
|
| |
400,000
|
480,000
|
|
400,000
|
480,000
|
(Operating Activities = (27,000) ; Investing Activities: = (40,000); Financing Activities = 70,000)
|
Cash Flow Statement
|
|
Particular
|
Rs
|
Rs.
|
Particular
|
Rs
|
Rs
|
|
(A) Cash Flow from Operating Activities
|
|
|
(B) Cash Flow from Investing Activities
|
|
|
|
Net Profit before Interest & Tax
|
15000
|
|
Purchase of Fixed Assets / Inventory
|
-40000
|
|
|
Adjustment for
|
|
|
Sale of Fixed Assets / Inventory
|
(+)
|
|
|
Depreciation
|
3000
|
|
Dividend Received
|
(+)
|
|
|
Goodwill written off
|
(+)
|
|
Interest Received
|
(+)
|
|
|
Preliminary Expenses written off
|
1000
|
|
Rent Received
|
(+)
|
-40000
|
|
Underwriting commission
|
(+)
|
|
|
|
|
|
Cost of Issue of Debentures
|
(+)
|
|
(C) Cash Flow from Financing Activities
|
|
|
|
Loss on Fixed Assets
|
(+)
|
|
Issue of Shares / Debentures
|
80000
|
|
|
Profit on Fixed Assets
|
(-)
|
|
Loan Disbursement
|
(+)
|
|
|
Operating cash before Working Capital Changes
|
19000
|
|
Payment of Preference Shares / Debentures
|
-10000
|
|
| |
|
|
Loan Paid
|
(-)
|
|
|
Increase in Current Assets
|
-50000
|
|
Interest Paid
|
(-)
|
|
|
Decrease in Current Assets
|
12000
|
|
Dividend Paid
|
(-)
|
70000
|
|
Increase in Current Liabilities
|
(+)
|
|
|
|
|
|
Decrease in Current Liabilities
|
-8000
|
|
Net Balance in Cash & Cash Equivalent
|
|
3000
|
|
Cash Flow from Working Capital
|
-46000
|
-27000
|
Opening Balance in Cash & Cash Equivalent
|
12000
|
|
|
Net cash flow from Operating Activities
|
|
|
Closing Balance in Cash & Cash Equivalent
|
15000
|
|
|
Tax
|
|
|
|
|
|
Funds Flow Statement
A funds-flow statement analyzes the sources and applications of funds of long-term nature and the changes in working capital. It tallies funds generated from various sources with various uses to which they are put and determines the financial consequences of business operations.
A funds-flow statement is useful to find answers to questions such as:
- If profits are increasing year after year, why is our liquidity deteriorating?
- How were the proceeds of the equity issue utilized? How was the new plant funded?
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