Analysis of the Operation and Financial Condition of the Enterprise

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Analysis of the Operation and Financial Condition of the Enterprise6. Equipment was bought, for the payment of which ordinary shares were issued. The fairvalue of the shares at the moment of exchange were 25,000.Prepare the cash flow statement for the year ended 31 st December, 2003, by using theindirect method.Solution to Exercise 4Amount (in CU)Net loss (15,000)Cash flow from operating activities:Depreciation 17 000 4Loss on disposal of land 10 000Increase in accounts receivable (20 000)Increase in prepaid expenses (5 000)Increase in accounts payable 5 000Net cash flow from operating activities (8 000)Cash flow from investments:Cash receipt from disposal of land 8 000Cash receipt from disposal of equipment 5 000 5Cash flow from investments 13 000Cash flow from financial activities:Repayment of liabilities for the debentures (12 000) 6Dividend payout (3 000)Issue of debentures 20 000 7Cash flow from financial activities: 5 000Total 10 000Opening cash balance 31 000Closing cash balance 41 000Exercise 5.During the year of reporting there was a net profit of 300,000 disclosed by the enterprise.The value of accumulated depreciation on buildings and equipment was 80,000.Below the opening and closing balances of short-term assets and short-term liabilitiesfor the year are given:At the end of theyearAt the beginningof the yearCash resources 20,000 15,000122
Analysis of the Operation and Financial Condition of the EnterpriseAccounts receivable 19,000 30,000Stock of goods and materials 50,000 65,000Prepaid expenses 7,500 5,000Accounts payable 12,000 16,000Taxation payable 1,600 1,200By using the indirect method, estimate the amount of net cash flow from operatingactivities.Solution to Exercise 5Amount(thous.)Net profit 300Depreciation 80Decrease in accounts receivable 11Decrease in stock 15Increase in prepaid expenses (2,5)Decrease in accounts payable (4)Increase in taxation payable 0,4Net cash flow from operating activities 399,9Exercise 6.Liquidity ratios of Enterprise ‘ABC’ have become unsatisfactory in the recent period.The most recent balance sheet and income statement are as follows:Income statement:LsTurnover 452.000Production costs: ?Opening stock balancePurchases of stock 331.000Closing stock balance 220.000Gross profit ?Other expenses 132.000Profit (loss) for the period reported ?Balance sheet:Fixed assets 357.000Current assets ?Stock 220.000Accounts receivable 123.000Capital and reserves ?Equity 127.000Retained earnings 158.000123
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Analysis of the Operation and Financial Condition of the Enterprise

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