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    Cash Flow Statement Report: Receivables

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    Shimaa Mohamed
    The cash flow statement for 2019 aimed to explain a $40,000 increase in cash balance. Operating activities generated $126,000 in cash inflow primarily from net income. Investing activities resulted in a $33,000 outflow mainly to purchase equipment. Financing activities saw an outflow as well due to dividends and debt repayment. Despite the outflows from investing and financing, operating cash flows exceeded them, resulting in the $40,000 excess cash balance. Key ratios showed net income generated over 100% of operating cash flows and operating cash flows financed equipment purchases over 100%.

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    Cash Flow Statement Report: Receivables

    Uploaded by

    Shimaa Mohamed
    22 views2 pages
    The cash flow statement for 2019 aimed to explain a $40,000 increase in cash balance. Operating activities generated $126,000 in cash inflow primarily from net income. Investing activities resulted in a $33,000 outflow mainly to purchase equipment. Financing activities saw an outflow as well due to dividends and debt repayment. Despite the outflows from investing and financing, operating cash flows exceeded them, resulting in the $40,000 excess cash balance. Key ratios showed net income generated over 100% of operating cash flows and operating cash flows financed equipment purchases over 100%.

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    financial analysis 8

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    The cash flow statement for 2019 aimed to explain a $40,000 increase in cash balance. Operating activities generated $126,000 in cash inflow primarily from net income. Investing activities resulted in a $33,000 outflow mainly to purchase equipment. Financing activities saw an outflow as well due to dividends and debt repayment. Despite the outflows from investing and financing, operating cash flows exceeded them, resulting in the $40,000 excess cash balance. Key ratios showed net income generated over 100% of operating cash flows and operating cash flows financed equipment purchases over 100%.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    22 views2 pages

    Cash Flow Statement Report: Receivables

    Uploaded by

    Shimaa Mohamed
    The cash flow statement for 2019 aimed to explain a $40,000 increase in cash balance. Operating activities generated $126,000 in cash inflow primarily from net income. Investing activities resulted in a $33,000 outflow mainly to purchase equipment. Financing activities saw an outflow as well due to dividends and debt repayment. Despite the outflows from investing and financing, operating cash flows exceeded them, resulting in the $40,000 excess cash balance. Key ratios showed net income generated over 100% of operating cash flows and operating cash flows financed equipment purchases over 100%.

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    © All Rights Reserved
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    of 2

    Cash Flow statement Report

     The cash flow statement of year 2019 is conducted with the objective of

    explaining the reasons behind the increment of 40,000 in the cash balance during

    2019 ,explaining such reasons needs analyzing the cash flow from the 3 activities

    of operating ,financing and investing

     At first the cash flow from operating activities calculated to have a net cash

    inflow of 126,000 and this was because the net income in 2019 being the main

    reason ,in addition there was a cash inflow due to selling inventory ,while the cash

    outflows were due to higher balance of receivables (more credit sales ) and

    lower balance of payables (payment of liabilities ).The net income had been

    proved to be able to generate cash flow from operating activities and this is a

    good sign that had been evidenced with the quality of income ratio that had been

    1.22 ,this number implies that every pound of net profit can produce 1.22 pounds

    of cash flow from operating activities

     Moreover the cash flow from investing activities calculated to have a net cash

    outflow of 33000 and this was because of the purchase of equipment being the

    main reason ,while the cash outflows were due to sale of land .The cash flow

    from operating activities had been proven to finance sufficiently the cash outflows

    for plant, and equipment ,this was evidenced with the capital acquisition ratio

    which was more than 1

     Moreover the ,and this was because of dividends payment and bonds redemtption

    being the main reasons .While the cash inflows had been sue to selling issued

    ordinary shares
     At last the net cash inflow from operating activities had been enough to compensate

    the net cash outflows from investing activities and financing activities ,and generated

    excess cash of 40,000 that caused the cash ending balance 2019 to be 73000

    Ratios

    A. Quality of Income ratio = Cash from operating activities/Net income

    =126000/103000 =1.223

     The net income had been proved to be able to generate cash flow from operating

    activities and this is a good sign that had been evidenced with the quality of

    income ratio that had been 1.22 ,this number implies that every pound of net

    profit can produce 1.22 pounds of cash flow from operating activities

    B. Capital Acquisitions ratio = Cash from operating activities/Cash paid to

    property ,plant and equipment = 126000/60000=2.1

     The cash flow from operating activities had been proven to finance sufficiently

    the cash outflows for plant, and equipment ,this was evidenced with the capital

    acquisition ratio which was more than 1

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