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Financial
Statement Analysis-FIN621
VU
Lesson-14
STATEMENTS
CASH FLOWS
(Continued)
Additional
Information (AI) obtained
from analysis of changes in the balance
sheet accounts during
the
current year:-
Cash
& Cash equivalents at beginning of
the year
Rs.40,
000
at end of the
year
Rs.75,
000
Other
additional information classified
into the three categories i.e.
Operating, Investing and
Financing
Activities, was as
follows:-
Additional
Information relating to Operating
Activities
1.
Accounts Receivable increased by
Rs.30, 000.
2.
Accrued interest i.e. interest receivable
decreased by Rs.1, 000
(Dividend revenue
recognized on
cash basis & interest revenue on accrual
basis).
3.
Inventory
increased by Rs.10, 000 and
accounts payable by Rs.15,
000.
4.
Short-term
prepared expenses increased by Rs.3,
000.
5.
Accrued
expenses (payable) decreased by
Rs.6, 000.
6.
Depreciation
for the year Rs.40,
000.
7.
Interest
payable increased by Rs.7,
000.
8.
Income
tax payable decreased by
Rs.2, 000.
Additional
Information relating to Investing
Activities
1.
Marketable Securities (not qualifying as
cash equivalent) show debit entries of
Rs.65,000 and
credit
entries of Rs.44,000.
2.
Notes Receivable Account
shows Rs.17, 000 debit and
Rs.12, 000 credits.
3.
Purchase of plant assets for
Rs.200,000: Cash Rs.160,000 and long-term
Note Payable
Rs.40,000
4.
Sale of plant assets with
book value Rs.44,000
Additional
Information relating to Financing
Activities
1.
Borrowed
Rs.45, 000 cash by issuing
short-term Notes Payable.
2.
Repaid
Rs.55, 000 on account of
principal on Loans & Notes
Payable.
3.
Issued
bonds payable Rs.100, 000
cash.
4.
Issued
for cash 1000 shares of
Rs.10 par value at Rs.50 per
share.
5.
Cash
dividend paid Rs.40,000
Re-arranging
Income Statement in the two
categories of Operating and Investing
Activities
would
give the following picture of the
Income Statement:
MOOSA
CORPORATIAON
Income
statement
For
the year ended June 30,
________
Sales,
other revenue and gains
Rs._____
Net
sales
900,000
Dividend
Revenue
3,000
54
Financial
Statement Analysis-FIN621
VU
Interest
Revenue
6,000
Gain
on sales of plant
assets
31,000
Total
940,000
Cost
of sales, other expenses and
losses
Cost
of goods sold
500,000
Operating
expenses
300,000
(Includes
Dep of Rs. (40,
000)
Interest
expenses
35,000
Income
tax expenses
36,000
Loss
on sale of marketable securities
4,000
Total
875,000
Net
Income
65,000
55
Table of Contents:
- ACCOUNTING & ACCOUNTING PRINCIPLES
- Dual Aspect of Transactions
- Rules of Debit and Credit
- Steps in Accounting Cycle
- Preparing Balance Sheet from Trial Balance
- Business transactions
- Adjusting Entry to record Expenses on Fixed Assets
- Preparing Financial Statements
- Closing entries in Accounting Cycle
- Income Statement
- Balance Sheet
- Cash Flow Statement
- Preparing Cash Flows
- Additional Information (AI)
- Cash flow from Operating Activities
- Operating Activities’ portion of cash flow statement
- Cash flow from financing Activities
- Notes to Financial Statements
- Charging Costs of Inventory to Income Statement
- First-in-First - out (FIFO), Last-in-First-Out (LIFO)
- Depreciation Accounting Policies
- Accelerated-Depreciation method
- Auditor’s Report, Opinion, Certificate
- Management Discussion & Analyses (MD&A)
- TYPES OF BUSINESS ORGANIZATIONS
- Incorporation of business
- Authorized Share Capital, Issued Share Capital
- Book Values of equity, share
- SUMMARY
- SUMMARY
- Analysis of income statement and balance sheet:
- COMMON –SIZE AND INDEX ANALYSIS
- ANALYSIS BY RATIOS
- ACTIVITY RATIOS
- Liquidity of Receivables
- LEVERAGE, DEBT RATIOS
- PROFITABILITY RATIOS
- Analysis by Preferred Stockholders
- Efficiency of operating cycle, process
- STOCKHOLDERS’ EQUITY SECTION OF THE BALANCE SHEET 1
- STOCKHOLDERS’ EQUITY SECTION OF THE BALANCE SHEET 2
- BALANCE SHEET AND INCOME STATEMENT RATIOS
- Financial Consultation Case Study
- ANALYSIS OF BALANCE SHEET & INCOME STATEMENT
- SUMMARY OF FINDGINS