CASE STUDY DOCUMENT: Statement of Cash Flows for the two years will be uploaded under course

academic information on your course site. Question 1:

1.1. Identify the three sections of the cash flow statement and elaborate on the items that you find under each section.

1.2. Compare 2 lines under each section. (Thus compare 6 lines in total.)

1.3. Then make recommendations for future improvements.

Profit and loss account for the year ended 31 December: Balance sheet as at 31 December: Cash flow statement for the year ended 31 December last year Net cash inflows from operating activities 000 (see Note 1 below) 1,972 Investing activities Payments to acquire tangible fixed assets (8,670) (See Note 3 below) Net cash outflows from investing activities (8,670) Financing Bank loan Bank overdraft Dividends paid 3,000 4,250 (600) Net cash inflows from financing 6,650 Net decrease in cash and cash equivalents (48) Analysis of cash and cash equivalents during the year ended 31 December last year ! ! Note 2: Tax owed at start of the year (from the balance sheet from year before last) Add Tax charge for the year (from the income statement) Less Tax owed at the end of the year (from the balance sheet from last year) Tax paid during the year 000420780(780)420 Note 3: Since there were no disposals, the additions must be the difference between the start and end of the year fixed asset values, adjusted by the depreciation charge, e.g