Accounting and Financial Management

CAPRI LIMITED: PERFORMANCE EVALUATION AND PLANNING

For many years Capri Limited has delivered on its quality products promise to consumers, ensuring continued access to an ever-growing range of established and well-loved brands. Through a spirit of innovation, the company continues to deliver new and exciting products in response to the evolving needs of its customers. Despite its success the management has noted areas for improvement. This is evident in the following financial statements for the past two years:

CAPRI LIMITED
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2021
Rand
Cash flows from operating activities	756 000
Profit before interest and tax/Operating profit	900 000
Adjustments to convert to cash from operations	?
Add: Depreciation	252 000
?	?
?	?
Profit before working capital changes	?
Working capital changes	194 400
Decrease in inventory	288 000
Increase in receivables	(396 000)
Increase in payables	302 400
Cash generated from operations	1 346 400
Interest income	72 000
Dividends paid	?
Company tax paid	(388 800)
Cash flows from investing activities	(1 368 000)
Non-current assets purchased	(1 476 000)
Proceeds from sale of vehicles (sold at a profit of R150 000)	540 000
Increase in long-term investments	(612 000)
Disposal of long-term investments (disposed at a loss of R150 000)	180 000
Cash flows from financing activities	720 000
Proceeds from issue of ordinary shares	720 000
Net increase/decrease in cash and cash equivalents	?
Cash and cash equivalents at beginning of year	792 000
Cash and cash equivalents at end of year	?

QUESTIONS

REQUIRED

Answer the questions below that are based on the Statement of Cash Flows for the year ended 31 December 2021 provided above:

1) Dividends paid

2) Cash and cash equivalents at the end of the year

3) Carrying/Book value of the vehicles sold

4) Apart from depreciation (R252 000), identify TWO (2) other adjustments (with the amounts) that would be needed to convert to cash from operations.

5) Comment on the following:

(a) Cash flows from operating activities R756 000

(b) Increase in receivables (R396 000)

(c) Cash flows from investing activities (R1 368 000)