Appendix A, B, and C contain cash-flow statements from three companies. Each cash-flow statement

has Three years of data. Examine the contents of these cash-flow statements carefully. Answer the

following questions about each of the three cash-flow statements.

1. For each of the three years on the Statement of Cash Flows:

a) What are the major sources of cash for each firm? What are the major uses of cash for

each firm?

b) What was the trend in cash flow from (continuing) operations for each firm?

c) Was cash flow from operations greater than or less than net income? Explain in detail

the major reasons for the difference between these two figures. (Answer this question

using only Appendix B: Cash flow statement for BHP Limited).

d) Was the firm able to generate enough cash from operations to pay for all of its capital

expenditures?

e) Did the cash flow from operations cover both the capital expenditures and the dividend

payments made by the firm (if any)?

f) If the firm has generated excess cash from operations, how did the firm invest the excess

cash? If not, what were the sources of cash the firm used to pay for the capital

expenditures and/or dividends?

g) Did the firm use the working capital (current asset and current liability) accounts other

than cash and cash equivalents as sources of cash, or uses of cash? (Answer this question

using only Appendix B: Cash flow statement for BHP Limited).

h) What other major items affected cash flows?

i) What was the trend in capital expenditures for each firm?

j) What was the trend in dividends (if any) for each firm?

k) What was the trend in net borrowing (proceeds from borrowing less payments of shortand long-term debt) for each firm?

l) What was the trend in working capital accounts? (Answer this question using only

Appendix B: Cash flow statement for BHP Limited).

2. Critically evaluate the financial strength of each of the three companies based on the evidence

presented in the Statement of Cash Flows.

3. If you are asked to evaluate these three companies for lending purposes, which of the three

companies you will select for lending? Explain Why.

Appendix A: Funtastic Limited, Consolidated Cash Flow Statement for the year ended 30 June 2018 2018 2017 2016 Cash Flows from Operating Activities AUSOOO AU$OOO AUSOOO Receipts from customers 46,463 61,731 94,773 Payments to suppliers and employees (54,777) (60,897) (98,145) Cash (utilised)/generated from operations (8,314) 834 (3,372) Income taxes refunded/(paid) 49 (25) (163) Interest and other costs of finance paid (1,917) (3,559) (3,794 Net cash outflow from operating activities (10,182) (2,750) (7,329) Cash flows from investing activities Interest and other investment income received 2 439 651 Payments for plant and equipment (145) (888 (884) Payments for other intangible assets (281) (540) (325) Proceeds from sale of international subsidiary 126 Net cash outflow from investing activities (298) (989) (558) Cash flows from financing activities Proceeds from borrowings 3,647 7,457 2,630 Repayment of commercial bills (1,000 Proceeds from share issue 8,355 1,111 Costs from share issue (438 Net cash inflow from financing activities 10,547 3,647 7,568 Net increase/(decrease) in Cash Held 67 (92] (319) Cash and cash equivalents at the beginning of the year 664 764 904 Effects of exchange rate changes on the balance of cash held in (13) (8) 179 foreign currencies Cash and cash equivalents at the end of the year 718 664 764Appendix B: BHP Limited, Consolidated Cash Flow Statement for the year ended 30 June 2018 2018 2017 2016 USSM USSM USSM Restated Restated Operating activities Profit before taxation 14,751 11,137 1,791 Adjustments for: Depreciation and amortisation expense 6,286 6.184 6,210 Impairments of property, plant and equipment, financial assets 333 193 186 and intangibles Net finance costs 1 245 1,417 1,013 (Profit)/loss from equity accounted investments, related (147) (272) 2,104 impairments and expenses Other 597 194 467 Changes in assets and liabilities: Trade and other receivables (662) 267 1,387 Inventories (182) (687) 521 Trade and other payables 719 512 (1,272) Provisions and other assets and liabilities 7 1333) (316) Cash generated from operations 22,949 18,612 12,091Dividends received 709 636 301 Interest received 291 164 128 Interest paid (1,177) (1,148) (829 Settlement of cash management related instruments (292) (140 Net income tax and royalty-related taxation refunded 17 337 135 Net income tax and royalty-related taxation paid (4,935 (2,585 (2,286) Net operating cash flows from Continuing operations 17,561 15 876 9.840 Net operating cash flows from Discontinued operations 900 928 785 Net operating cash flows 18,461 16,804 10,625 Investing activities Purchases of property, plant and equipment (4,979) (3,697) (5,707) Exploration expenditure (874) 1966 [752) Exploration expenditure expensed and included in operating 641 610 419 cash flows Net investment and funding of equity accounted investments 204 (234) (217) Proceeds from sale of assets 89 529 Proceeds from divestment of subsidiaries, operations and joint 34 - 187 166 operations, net of their cash Other investing (141) (153) (20) Net investing cash flows from Continuing operations (5,060 (3,724) (6,018 Net investing cash flows from Discontinued operations (861) (437) (1,227) Net investing cash flows (5,921) (4,161 (7.245 Financing activities Proceeds from interest bearing liabilities 528 1,577 7,239 Settlements)/ proceeds from debt related instruments (218) 36 156 Repayment of interest bearing liabilities (4,188) (7,114) (2,781 Purchase of shares by Employee Share Ownership Plan (ESOP) | (171) (108) (106) Trusts Dividends paid (5,220) (2,921) (4,130) Dividends paid to non-controlling interests (1,582) (575) (62 Net financing cash flows from Continuing operations [(10,851) (9,105) 316 Net financing cash flows from Discontinued operations 140 [28) (32) Net financing cash flows (10,891) (9,133] 284 Net increase in cash and cash equivalents from Continuing 1,650 3,047 4,138 operations Net (decrease)/increase in cash and cash equivalents from (1) 463 (474) Discontinued operations Cash and cash equivalents, net of overdrafts, at the beginning of 14,108 10,276 6,613 the financial year Foreign currency exchange rate changes on cash and cash 56 327 (1) equivalents Cash and cash equivalents, net of overdrafts, at the end of the | 15,813 14,108 10,276 financial yearAppendix C: Santos Limited, Consolidated Cash Flow Statement for the year ended 31 December 2018 2018 2017 2016 USSM USSM USSM Cash flows from operating activities Receipts from customers 3,740 3,217 2,708 Dividends received 6 12 12 Pipeline tariffs and other receipts 106 56 60 Payments to suppliers and employees 1,816] (1,611) (1,600) Restoration expenditure (36 (37 (17) Exploration and evaluation seismic and studies (71) 168 Royalty and excise paid (85) (57) (34 Borrowing costs paid (194) (254) (226) Income taxes paid (69) (28 (17) Royalty-related taxes paid (15] 14) Other operating activities 37 26 26 Net cash provided by operating activities 1,578 1,248 840 Cash flows from investing activities Exploration and evaluation assets (66) (146] (128 Oil and gas assets (490) (483) 500 Other land, buildings, plant and equipment 10 (5) 14) Acquisitions of oil and gas assets [10) (49] Proceeds from disposal of non-current assets 26 145 447 Acquisition of subsidiary, net of cash acquired (1,933) Costs associated with acquisition of subsidiaries (10 Proceeds from disposal of subsidiaries 126 Borrowing costs paid (6) (6) (20) Other investing activities 10 18 Net cash used in investing activities (2,373) 1534 (205) Cash flows from financing activities Dividends paid 73) 143 Drawdown of borrowings 1,193 783 Repayment of borrowings (220) (2,442) (147 Net proceeds from issues of ordinary shares 149 733 Purchase of shares on-market (Treasury shares) Net cash provided by/(used in) financing activities 890 (1,518) 543 Net increase/[ decrease) in cash and cash equivalents 95 (804] 1,178 Cash and cash equivalents at the beginning of the 1,231 2,026 839 period Effects of exchange rate changes on the balances of (10) 9 cash held in foreign currencies Cash and cash equivalents at the end of the period 1,316 1,231 2,026