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Cash Flow Statements: C A Anil Tilak

This document provides an introduction to cash flow statements and outlines their key components and purposes. It discusses how cash flow statements are prepared by classifying cash flows into three activities: operating, investing, and financing. The operating activities section captures cash flows from core business operations, investing activities covers cash flows from purchases/sales of long-term assets and investments, and financing activities includes cash flows from equity/debt instruments and dividend payments. Preparing the cash flow statement highlights the changes in an organization's cash and cash equivalents over the year due to various cash inflows and outflows.

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Saloni Shah
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43 views

Cash Flow Statements: C A Anil Tilak

This document provides an introduction to cash flow statements and outlines their key components and purposes. It discusses how cash flow statements are prepared by classifying cash flows into three activities: operating, investing, and financing. The operating activities section captures cash flows from core business operations, investing activities covers cash flows from purchases/sales of long-term assets and investments, and financing activities includes cash flows from equity/debt instruments and dividend payments. Preparing the cash flow statement highlights the changes in an organization's cash and cash equivalents over the year due to various cash inflows and outflows.

Uploaded by

Saloni Shah
Copyright
© © All Rights Reserved
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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CASH FLOW

STATEMENTS
C A ANIL TILAK
INTRODUCTION
 A Balance Sheet of any company is the status of assets and
Liabilities as on a particular date
 The owners Equity and liabilities on one side indicate the
sources from which the Entity,s Funds are obtained , on
the other side the asset side of the Balance sheet shows
the uses of those funds which would have been invested in
Land & Building Machinery etc
 As against this the Cash flow statement explains the
changes that took place in the various items in the
Balance Sheet during the period between the dates of two
balance sheets
CASH FROM OPERATING ACTIVITIES
 Net Profit Before Tax ---------
 Add Non Cash and Non Operating items
Depreciation on Assets
Goodwill Written off, Provision for Doubtful Debts
Loss On sale of Assets/Investments
Preliminary Exps,Discount on Issue,Share Issue Exps
Transfer to reserves,Provision for Taxation,Proposed Dividend
Less Profit on sale of Asset/Investments
Transfer from Reserves ---------
Adjustments on Working Capital
Less Increase in Current Assets( Stock, Debtors, Bills Rec,Prepaid,marketable Sec)
Add Decrease in Current Assets
Add Increase in Current Liabilities(Creditors Bills Payable,o/s Exps Prov For Tax Prop
Less Decrease in Current Liabilities ( Dividend Bank O/d) --------

Less Taxes Paid --------


======
CASH FROM INVESTING ACTIVITIES
Purchase of Fixed Assets (-------)
Purchase of Investments (-------)
Sale of Fixed Assets -------
Sale of Investments ------- ---------

CASH FROM FINANCING ACTIVITIES


Issue of Shares/Debentures --------
Receipt of Loan -------
Redemption of Shares/Debentures (-------)
Repayment of Loan (-------) ----------
Payment of Dividend (-------)

Cash and Cash Equivalents in the beginning of the year ---------


Cash and Cash Equivalents at the End of the year ======
CASH FLOW STATEMENTS SUMMARY
 Cash Flow statement is prepared on the basis of the Balance Sheets of two
years, profitability statement and some additional information
 Preparation of Cash Flow Statement is mandatory as per AS-3 for companies
listed on the stock exchange
 Cash Flow Statement is prepared by classifying cash flows in three activities
 Operating activities
 Investing activities
 Financing activities
 Cash Flow Statement highlights the change in cash and cash equivalents
during the course of the year due to various cash flows
 Cash Flow statement preparation is substantialy similar to that used for
preparation of Fund Flow Statement.Only difference is that Cash Flow
statement focuses on Cash /Cash Equivalents as against working capital in
case of Fund Flow Statement

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