A potential investor has approached you for some help in analyzing the financial information on QW, an
Question:
A potential investor has approached you for some help in analyzing the financial information on QW, an entity in which he is considering investing. QW has been trading for many years and has recently implemented a new corporate strategy to focus on the core aspects of the business. The statement of cash flows for the QW group for the year ended 31 December 20X1 is below:
Required:
Analyze the above statement of cash flows of QW and prepare a brief report that highlights the key features of each category of cash flow that would be of interest to a potential investor.
Transcribed Image Text:
Cash flows from operating activities Profit before taxation Adjustments for: Depreciation Less gain on sale of investments Add back loss on sale of property, plant and equipment Investment income Interest costs Decrease in trade receivables Increase in inventories Increase in payables Cash generated from operations Interest paid Income taxes paid Net cash from operating activities Cash flows from investing activities Disposal of subsidiary (net of cash) Acquisition of property, plant and equipment Proceeds from sale of equipment Proceeds from sale of investments Investment income received Net cash from investing activities Cash flows from financing activities Proceeds from share issue Proceeds from long-term borrowings Dividend paid to equity holders of the parent Net cash used in financing activities 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 $ million 950 450 (80) 10 (210) 320 1,440 320 (470) 210 1,500 (140) (660) 850 (1,250) 40 390 120 600 280 (1,200) $ million 700 150 (320) 530 230 760
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Related Book For
International Financial Reporting And Analysis
ISBN: 9781473766853
8th Edition
Authors: David Alexander, Ann Jorissen, Martin Hoogendoorn
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