ACC & FIN MGT 2025 ASSIGNMENT 1 2025 ACC & FIN MGT 2025
DISCLAIMER
THE DOCUMENT PRESENTED IS A DEMOSTRATION ON HOW STUDENTS CAN
APPROACH THE ASSIGNMENT FOR ACCOUNTING & FIN MGT. IT IS BASED ON
PRESCRIBED MATERIAL AND EXTERNAL RESEARCH. THE DOCUMENT
CONTAINS BOTH SHORT NOTES AND A RESPONSE EXAMPLE FOR EACH
QUESTION. STUDENTS ARE THEREFORE ADVISED NOT TO COPY AND PASTE
BUT USE THE DOCUMENT AS A RESEARCH GUIDE THAT WOULD HELP THEM
DRAFT THEIR OWN FINAL COPIES.
,ACC & FIN MGT 2025 ASSIGNMENT 1 2025 ACC & FIN MGT 2025
QUESTION 1 (25 Marks)
1.1.1 Decrease in payables
The working capital changes are the sum of the individual items:
Decrease in inventory + Increase in receivables + Decrease in payables = Total
working capital changes
𝑅 500,000 + (𝑅 4,500,000) + ? = (𝑅 6,000,000)
𝐿𝑒𝑡 𝑋 𝑏𝑒 𝑡ℎ𝑒 𝑑𝑒𝑐𝑟𝑒𝑎𝑠𝑒 𝑖𝑛 𝑝𝑎𝑦𝑎𝑏𝑙𝑒𝑠.
𝑅 500,000 − 𝑅 4,500,000 + 𝑋 = −𝑅 6,000,000
−𝑅 4,000,000 + 𝑋 = −𝑅 6,000,000
𝑋 = −𝑅 2,000,000
1.1.2 Investment income
𝐶𝑎𝑠ℎ 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑎𝑖𝑑 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
− 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 𝑝𝑎𝑖𝑑 − 𝐶𝑜𝑚𝑝𝑎𝑛𝑦 𝑡𝑎𝑥 𝑝𝑎𝑖𝑑
= 𝐶𝑎𝑠ℎ 𝑓𝑟𝑜𝑚 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠
𝑅 31,000,000 − 𝑅 2,000,000 + ? − 𝑅 8,000,000 − 𝑅 5,700,000 = 𝑅 17,000,000
𝐿𝑒𝑡 𝑥 𝑏𝑒 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛𝑐𝑜𝑚𝑒.
𝑅 31,000,000 − 𝑅 2,000,000 − 𝑅 8,000,000 − 𝑅 5,700,000 + 𝑥 = 𝑅 17,000,000
𝑅 15,300,000 + 𝑥 = 𝑅 17,000,000
= 𝑹 𝟏, 𝟕𝟎𝟎, 𝟎𝟎𝟎
The investment income is R 1 700 000.
, ACC & FIN MGT 2025 ASSIGNMENT 1 2025 ACC & FIN MGT 2025
1.2 Increase or decrease in non-current liabilities
The company increased its non-current liabilities.
The cash flows from financing activities must balance the statement. The net increase
in cash is the sum of cash flows from all activities:
Cash from operating activities + Cash from investing activities + Cash from financing
activities = Net increase in cash
R 17,000,000 + (R 26,000,000) + Cash from financing activities = R 300,000
-R 9,000,000 + Cash from financing activities = R 300,000
Cash from financing activities = R 9,300,000
The primary component of financing activities is the change in long-term borrowings.
A positive cash flow from financing activities (R 9.3 million) indicates that the company
received cash from its financing sources, which, in this context, means it increased its
long-term borrowings (a non-current liability).0717513144
1.3 Significant changes to the financial position evident in this Statement of Cash Flows
and not in Statement of Comprehensive Income
The company's significant investment in non-current assets
It spent R 19 million on new assets and a further R 7 million on a financial investment,
which indicates a strategy for future growth not apparent from the income statement
alone.
The management of working capital
The income statement shows sales and profit, but the cash flow statement reveals that
despite being profitable, the company's cash was tied up in a large increase in
receivables (R4.5m) and a decrease in payables (R2m), negatively impacting
operating cash flow.
The source of financing for expansion
DISCLAIMER
THE DOCUMENT PRESENTED IS A DEMOSTRATION ON HOW STUDENTS CAN
APPROACH THE ASSIGNMENT FOR ACCOUNTING & FIN MGT. IT IS BASED ON
PRESCRIBED MATERIAL AND EXTERNAL RESEARCH. THE DOCUMENT
CONTAINS BOTH SHORT NOTES AND A RESPONSE EXAMPLE FOR EACH
QUESTION. STUDENTS ARE THEREFORE ADVISED NOT TO COPY AND PASTE
BUT USE THE DOCUMENT AS A RESEARCH GUIDE THAT WOULD HELP THEM
DRAFT THEIR OWN FINAL COPIES.
,ACC & FIN MGT 2025 ASSIGNMENT 1 2025 ACC & FIN MGT 2025
QUESTION 1 (25 Marks)
1.1.1 Decrease in payables
The working capital changes are the sum of the individual items:
Decrease in inventory + Increase in receivables + Decrease in payables = Total
working capital changes
𝑅 500,000 + (𝑅 4,500,000) + ? = (𝑅 6,000,000)
𝐿𝑒𝑡 𝑋 𝑏𝑒 𝑡ℎ𝑒 𝑑𝑒𝑐𝑟𝑒𝑎𝑠𝑒 𝑖𝑛 𝑝𝑎𝑦𝑎𝑏𝑙𝑒𝑠.
𝑅 500,000 − 𝑅 4,500,000 + 𝑋 = −𝑅 6,000,000
−𝑅 4,000,000 + 𝑋 = −𝑅 6,000,000
𝑋 = −𝑅 2,000,000
1.1.2 Investment income
𝐶𝑎𝑠ℎ 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑 𝑓𝑟𝑜𝑚 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 − 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑝𝑎𝑖𝑑 − 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
− 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑𝑠 𝑝𝑎𝑖𝑑 − 𝐶𝑜𝑚𝑝𝑎𝑛𝑦 𝑡𝑎𝑥 𝑝𝑎𝑖𝑑
= 𝐶𝑎𝑠ℎ 𝑓𝑟𝑜𝑚 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠
𝑅 31,000,000 − 𝑅 2,000,000 + ? − 𝑅 8,000,000 − 𝑅 5,700,000 = 𝑅 17,000,000
𝐿𝑒𝑡 𝑥 𝑏𝑒 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛𝑐𝑜𝑚𝑒.
𝑅 31,000,000 − 𝑅 2,000,000 − 𝑅 8,000,000 − 𝑅 5,700,000 + 𝑥 = 𝑅 17,000,000
𝑅 15,300,000 + 𝑥 = 𝑅 17,000,000
= 𝑹 𝟏, 𝟕𝟎𝟎, 𝟎𝟎𝟎
The investment income is R 1 700 000.
, ACC & FIN MGT 2025 ASSIGNMENT 1 2025 ACC & FIN MGT 2025
1.2 Increase or decrease in non-current liabilities
The company increased its non-current liabilities.
The cash flows from financing activities must balance the statement. The net increase
in cash is the sum of cash flows from all activities:
Cash from operating activities + Cash from investing activities + Cash from financing
activities = Net increase in cash
R 17,000,000 + (R 26,000,000) + Cash from financing activities = R 300,000
-R 9,000,000 + Cash from financing activities = R 300,000
Cash from financing activities = R 9,300,000
The primary component of financing activities is the change in long-term borrowings.
A positive cash flow from financing activities (R 9.3 million) indicates that the company
received cash from its financing sources, which, in this context, means it increased its
long-term borrowings (a non-current liability).0717513144
1.3 Significant changes to the financial position evident in this Statement of Cash Flows
and not in Statement of Comprehensive Income
The company's significant investment in non-current assets
It spent R 19 million on new assets and a further R 7 million on a financial investment,
which indicates a strategy for future growth not apparent from the income statement
alone.
The management of working capital
The income statement shows sales and profit, but the cash flow statement reveals that
despite being profitable, the company's cash was tied up in a large increase in
receivables (R4.5m) and a decrease in payables (R2m), negatively impacting
operating cash flow.
The source of financing for expansion
