Exercise – Construct a Cash Flow Statement

Here is the answer of Exercise – Construct a Cash Flow Statement.

All figures in $ and in ‘000s, except per share data

Cash flows from operating activities260
Cash flows from investing activities-200
Investment in Property, plant & equipment (note 1)-200
Cash flows from financing activities-110
Loans raised50
Dividends paid-150
Interest paid-10
Net change in cash-50
Cash brought forward60
Cash carried forward10

Cash Flows from Operating Activities

Profit after tax180
Tax charge80
Finance cost10
Decrease/(increase) in inventory (note 1)-20
Decrease/(increase) in trade receivables (note 2)50
(Decrease)/increase in trade payables (note 3)20
Tax paid (note 4)-90
Net cash flows from operating activities260

 Note 1 – Inventory

Inventory brought forward150
Inventory carried forward170
(Increase) in inventory (net investment in assets reducing cash available from operations)-20

Note 2 – Trade Receivables

Trade receivables brought forward200
Trade receivables carried forward150
Decrease in trade receivables (net decrease in assets increasing cash available from operations)50

Note 3 – Trade Payables

Trade payables brought forward140
Trade payables carried forward160
Increase in trade payables (net increase in liabilities increasing cash available from operations)-20

Note 4 – Tax

Tax payable balance brought forward110
Tax charge for the year80
Tax paid in the year (operating cash flow) to balance-90
Tax payable balance carried forward100

Note 5 – Property, Plant & Equipment

PPE at book value balance brought forward180
Depreciation charged in year-30
Additions to PP&E (net) to balance200
PPE at book value balance carried forward350

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