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Question 1 Cash flow statement for the year ended 31 December 2019 $ $ 405,500 Cash flows from operating activities Profit before interest and tax
Question 1 Cash flow statement for the year ended 31 December 2019 $ $ 405,500 Cash flows from operating activities Profit before interest and tax Adjustments for: Depreciation Write off of goodwill Gain on disposal of assets Increase in inventories Decrease in trade receivables Increase in trade payables Interest paid Taxation paid Net cash flow from operating activities 30,000 25,000 (13,000) (4,000 4,000 8,000 (8,500 (115,000 332,000 (368,000 85,000 (283,000) Cash flow from investing activities Purchase of assets Sale of assets Net cash flow from investing activities Cash flow from financing activities Issue of shares (including premium) Redemption of long-term borrowings Dividends paid Net cash flow from financing activities 60,000 (85,000) (25,000 (50,000) Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period (1,000) 32,000 31,000 ACCT3801 Analysis of changes in cash and cash equivalents Bank Cash Short term investment Total Year 1 (5,000) 7,000 30,000 32,000 Year 2 10,000 1,000 20,000 31,000 Change 15,000 (6,000) (10,000) (1,000) Required: A. Discuss Anthony's THREE (3) purposes of a cash flow statement. (6 marks) B. Comment on the performance of the company citing relevant items from the cash flow statement that will help Anthony understand the company's position. (10 marks) C. Suggest FOUR (4) strategies that a company can implement to improve its cash flow position. (4 marks) (Total 20 marks)
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