Determining the statements of cash flows

Assignment Help Accounting Basics

Reference no: EM13930358

Question 1

Following are statements of cash flows for Byron Ltd for the years ended 31 December:

	2014 $'000	2013 $'000
Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Interest paid Income taxes paid	360 (258) 1 (9) (24)	223 (180) - (5) (15)
Net cash flows from operating activities	70	36
Cash flows from investing activities Payments for property, plant and equipment Proceeds from sale of property, plant and equipment	(58) -	(11) 5
Net cash flows from investing activities	(58)	(6)
Cash flows from financing activities Proceeds from issue of shares Proceeds from borrowings Repayment of borrowings Distributions paid	13 28 (23) (21)	- 11 - (12)
Net cash flows from financing activities	(3)	(1)
Net increase (decrease) in cash held Cash at beginning of the reporting period	9 23	16 7
Cash at end of the reporting period	32	23

Byron Ltd's profit for 2013 and 2014 was $19 000 and $42 000 respectively.

Required:

(a) Describe what information and figures in these statements of cash flow employees of Byron Ltd would be interested in and examine. Explain your answer. Also discuss how employees would interpret the cash flows of Byron Ltd.

(b) Describe what information and figures in addition to your answer in (a) above, in these statements of cash flow an investor would be interested in and examine. (Please do not repeat your answer in (a) above). Explain your answer. Also discuss how an investor would interpret the cash flows of Byron Ltd.

(d) The net cash flows from investing activities for Byron Ltd for both 2013 and 2014 are negative. Discuss whether this is good or bad and whether you would normally expect this figure to be positive or negative.

(e) The net cash flows from financing activities for Byron Ltd for both 2013 and 2014 are negative. Discuss whether this is good or bad and whether you would normally expect this figure to be positive or negative.

(f) Which one of the three activities do you think is the most important cash activity for an entity? Justify your answer.

Question 2

Discuss how each of the three entities below normally trades (i.e. buy and sell). Based on these discussions, which one of the following three entities do you think would have the greatest proportion of their working capital held as cash (compared to the other components of their working capital), and which entity do you think would have the greatest proportion of their working capital held as accounts receivable (compared to the other components of their working capital)?

(a) Local convenience store

(b) Wholesaler of computers

Reference no: EM13930358

Questions Cloud

Implications of sontag''s claim for contemporary politics : ‘The problem is not that people remember through photographs, but that they remember only photographs. Discuss the implications of Sontag's claim for contemporary politics and humanitarian organisations

How many people are salaried and how many are hourly : Choose an employee from the employee table; delete this employee.

Essay about short story - the gift of the magi : Write an analytical essay about the short story about ,"the gift of the magi" and the critique, "the secret gift",by Ted Gup. Find the thesis/topic in the book and the critique. Do not compare or contrast or agree. JUST analyze the two texts

Describe any unintended consequences or behaviors : Describe any unintended consequences or behaviors that might arise when using this method of behavior change, and how you might plan for these unintended changes ahead of time.

Determining the statements of cash flows : Following are statements of cash flows for Byron Ltd for the years ended 31 December:

Find the confidence interval on downtime : What does the confidence level determine (in simple terms)? Determine the a risk for each of the confidence levels below. Find the confidence interval on downtime.

What are the unique challenges to persuasive writing : We are bombarded with persuasive writing every day. Cite one example. Persuasive writing is often more difficult than other forms of writing. What are the unique challenges to persuasive writing

What is best practice for intervening in peer victimization : Compare the two intervention programs (Educate Program and Incarcerate Program), what is the best practice for intervening in peer victimization?

Compute safeway inventory turnover ratio : Based on your computations in Requirements a and b, did Safeway's inventory management get better or worse from 2009 to 2010?

User Account

All Pages