Cash Flow statement

The following extracts were taken from the financial statements of Roof plc:

Statement of Profit or Loss for the year ending 31^st December 2020:

			m
Gross profit			560
Depreciation			-200
Profit from operations			360
Gain on disposal			32
Finance costs			-12
Profit before tax			380
Taxation			-160
Profit for the year			220

Statement of Financial Position as at 31^st December 2020

				2020	2019
				m	m
Non Current Assets
Property, Plant and Equipment				2,116	1,760
Current Assets
Inventory				136	120
Trade Receivables				88	96
Cash and Cash equivalents				288	256
				512	472
Total Assets				2,628	2,232
Equity and Liabilities
Equity
Ordinary Share Capital				1,200	1,000
Share Premium				120	80
Retained Earnings				444	384
				1,764	1,464
Non current Liabilities
Long term loans				480	400
Current Liabilities
Trade Payables				224	188
Tax				160	180
				384	368
Total Equity and Liabilities				2,628	2,232

Additional information:

1. During the year, assets with a carrying value of 112m were sold for proceeds of 144m.
2. Roof plc paid a dividend during the year.

Required:

1. Prepare a statement of cash flows for Roof plc for the year ending 31^st December 2020 in accordance with IAS 7 Statement of Cash Flows using the indirect method.

(33 marks)

2. Explain the purpose of the statement of cash flows

(2 marks)