Looking at the position statement of the firm over the last two years, Little Flower was quite happy that the performance of the firm had changed for the better. Her husband, PaiBinoy, looked over the numbers and appeared unsatisfied with the performance. Binoy being a product from a premier business school, suggested that the best way to look at the performance would be to prepare a cash flow statement of the firm and evaluate it… 

The balance sheets of M/s Little Flower Imports Limited, as at March 31, 20X5 and 20X6, are as follows (all figures in ₹):

You are also provided with additional information for the year is as follows:

Prepare a cash flow statement to show the cash flow from various activities of M/s Little Flower Imports Limited. Regarding the firms cash flow position, whom would you agree with, Binoy or Little Flower? Why?

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ASSETS Land Machine (Cost less Dep) Investments Closing Stock Debtors Bills Receivable Cash at Bank Total Assets M/s Little Flower Imports Limited Balance Sheet as on 31st March 20X5 120 80 10 15 20 6 4 255 20X6 120 100 10 20 30 10 5 295 LIABILITIES Share Capital Reserves Debentures Proposed Div. Sundry Creditors Total Liabilities (all figures in lakhs) 20X5 150 20 15 20 50 255 20X6 150 30 15 50 50 295