FINANCIAL REPORTING AND ANALYSIS
JANUARY 2021
MEMORANDUM
PREPARED BY: MTHOMBENI
0767297208
, QUESTION 1 (20 Marks)
UMHLALI LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
Profit before interest and tax/Operating profit 284800
Adjustments to convert to cash from operations
Add: Depreciation 30000
Profit before working capital changes 314800
Working capital changes 114000
Inventory (250000-120000) 130000
Accounts receivable (64000-40000) 24000
Accounts payable (138000-98000) (40000)
Cash generated from operations 428800
Interest paid (24000)
Dividends paid (56000+57000) (113000)
Company tax paid (6000+90240-8600) (87640)
204160
Cash flows from investing activities (50160)
Non-current assets purchased (30000+144000+2464160-2444000) (194160)
Proceeds from sale of fixed asset 144000
Cash flows from financing activities 20000
Proceeds from issue of shares (2180000-1760000) 420000
Loan redeemed (600000-200000) (400000)
Net increase (decrease) in cash and cash equivalents 174000
Cash and cash equivalents at beginning of year 22000
Cash and cash equivalents at end of year 196000
1
JANUARY 2021
MEMORANDUM
PREPARED BY: MTHOMBENI
0767297208
, QUESTION 1 (20 Marks)
UMHLALI LIMITED
CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020
Cash flows from operating activities
Profit before interest and tax/Operating profit 284800
Adjustments to convert to cash from operations
Add: Depreciation 30000
Profit before working capital changes 314800
Working capital changes 114000
Inventory (250000-120000) 130000
Accounts receivable (64000-40000) 24000
Accounts payable (138000-98000) (40000)
Cash generated from operations 428800
Interest paid (24000)
Dividends paid (56000+57000) (113000)
Company tax paid (6000+90240-8600) (87640)
204160
Cash flows from investing activities (50160)
Non-current assets purchased (30000+144000+2464160-2444000) (194160)
Proceeds from sale of fixed asset 144000
Cash flows from financing activities 20000
Proceeds from issue of shares (2180000-1760000) 420000
Loan redeemed (600000-200000) (400000)
Net increase (decrease) in cash and cash equivalents 174000
Cash and cash equivalents at beginning of year 22000
Cash and cash equivalents at end of year 196000
1