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    M/508/8849 - Construct Cash Flow Statement Of Grain Corp Ltd

    University: Regent College

    • Unit No: 12
    • Level: Undergraduate/College
    • Pages: 11 / Words 2712
    • Paper Type: Assignment
    • Course Code: M/508/8849 (RCF)
    • Downloads: 745
    Question :
    '

    The objective of this report is to analyze organisation’s annual report of last three years in order to manage all the financial accounts appropriately. In this regard major criteria of this report determines some major statements as:

    • Construct cash flow statement of Grain Corp Ltd.
    • Provide appropriate details through other comprehensive income statement of Grain Corp Ltd.
    • Discuss accounting for corporate income tax.

     

    '
    Answer :

    INTRODUCTION

    Financials are important part of company clarifying overall financial performance of firm. Present report deals with assessing financial statements of Grain Corp Ltd for the period of three years. Organisation is engaged in receival and storage of food items and is performing good in recent periods. Financials such as income statement, balance sheet, cash flow statement and other comprehensive income statement are evaluated for three years and interpretation is made regarding its performance in effective manner. 

    CASH FLOW STATEMENT

    1. List each items of cash flow statement of organisation and discuss changes in recent years

    There are various financials of company that are helpful in determining whether organisation is performing well or not in the market. It contains vital piece of information which is quite useful for external users and management to take effective decisions in the best possible manner. These financials are cash flow statement, income statement and balance sheet highlighting performance of organisation quite effectually (Doidge and et.al, 2018). Grain Corp Ltd is taken as the business entity and financial statements are analysed. It is engaged in business of agribusiness mainly receival and storage of food commodities and grains. Moreover, company is listed on Australian Securities Exchange (ASX) and thus, cash flow statement is evaluated for past three years below-

    Particulars

    2017

    2016

    2015

    Consumer receipts

    4824.1

    4350.5

    4315.5

     Suppliers and employees payments

    -4505.3

    -4125.7

    -4006.9

     

    318.8

    224.8

    308.6

    Proceeds from bank borrowings (Stock funding)

    42.2

    -4

    9.1

     Received interest

    2.4

    1.3

    2.6

    Interest paid

    -41.9

    -38.4

    -42.6

     Income taxes paid

    -21

    -32.2

    -6.6

    Net cash flow from operating activities

    300.5

    151.5

    271.1

    Making payment for Property, Plant and Equipment (PPE)

    -199.7

    -268.2

    -223.6

     Payment for computer software

    -26.5

    -7.9

    -12.8

    Proceeds from selling off PPE

    34.8

    4.4

    6.2

    Proceeds from investment sale or business

    106.6

     

     

    Investment Payment

    -35.6

    -5.9

    -2.3

    Received dividend

    83.2

     

    0.2

    Borrowings repaid by parties

     

     

    19.1

    Net cash outflow from investing activities

    -37.2

    -277.6

    -213.2

    Proceeds from loans

    941

    801.1

    679.8

    Loans Repayment

    -1080.7

    -696.6

    -561.8

    Paid dividends

    -42.3

    -22.9

    -28.6

    Non-controlling interest (NCI) in year

    1.5

     

     

    Treasury shares bought

    -4.1

     

     

    Net cash flow from financing activities

    -184.6

    81.6

    89.4

    Net decrease / (increase) of cash and cash equivalents (CCE)

    78.7

    -44.5

    147.3

    Opening balance

    307.6

    374

    206.2

     Effect of Exchange rate

    2.6

    -21.9

    20.5

    Ending balance of cash and cash equivalents

    388.9

    307.6

    374

     

    Cash flow statements of organisation is prepared for three financial years such as 2015, 2016 and 2017. It can be interpreted from the above statement that receivables are improved up to a high extent as it was 4315.6 in the financial year 2015, increased to 4350.5 in next period and 4824.1 in 2017. It implies that Grain Corp Ltd is able to collect outstanding amount from credit customers. Suppliers and employees' payments have increased in past three years and as such, materials are purchased in large quantity from suppliers. The amount of borrowings from bank is increased as well. It is evident from the fact that it was 9.1 in 2015, -4 in 2016 and hiked to 42.2 in 2017 year (Grain Corp Ltd. 2016). Furthermore, interest received is maximised as it was 2.6 in the year 2016, 1.3 in 2016 and 2.4 in next year. It clearly shows that interest income has been increased in past years. While, PPE payments have maximised as it was 223.6 in 2015, 268.2 in later period and decreased to 199.7 in 2017. On the other hand, payment made for computer software is increased as it was 12.8, 7.9 and 12.8 in 2015, 2016 and 2017 respectively. Sale of PPE has been attained in later year amounting to 34.8. While, there are no sale of any investments in 2015 and 2016 but it is found in 2017 of 106.6 injecting income for organisation.

    Moreover, payments from investment has increased from 2015 to 2017. Borrowings repaid by parties had been accomplished in 2015 of 19.1. Proceeds from loans is increased as the figure was 679.8, 801.1 and 941 respectively in past three years. On the other side, loans repayment has maximised up to a great extent as it was 561.8 in 2015, increased to 696.6 and 1080.7 in 2016 and 2017. The dividends paid to shareholders' are also hiked as figure was 28.6 in 2015, reduced to 22.9 in 2016 and again increased in later period to 42.3 which means that company's earnings has improved as higher dividends paid to shareholders. NCI is accomplished amounting to 1.5 in recent year because ownership in equity is attained besides from parent firm. Treasury shares are bought reducing cash to 4.1. Thus, cash outflow amounting to 184.4 is made in 2017 while in previous years, inflows were obtained. Hence, opening balance was 307.6 and closing balance was 388.9 in financial year 2017 clarifying that overall cash position is enhanced. 

    2. Comparative analysis of cash flows

    The cash flow statement of Grain Corp Ltd can be analysed and it shows that organisation's overall position of cash has been good. It is properly utilising cash in various activities with much ease. It is evident from the fact that cash flow from operating activities was 271.1 in 2015 which reduced to 151.5 in later year (Grain Corp Ltd. 2017). While, figure was maximised in 2017 as it reached to 300.5. It implies that firm's operational position is increased quite effectually. Besides this, investing activities is increased and cash was realised in three years. It shows that investments have been maximised quite effectually.

    This is evident from the fact that investing activities were 213.5 in the financial year 2015, increased to 277.5 in next year. However, it was reduced to 37.2 in 2017 period as purchases in fixed assets has decreased. On the other hand, financing activities are good as cash inflows amounting to 89.4 were accomplished in 2015 which decreased to 81.6 in 2016. While, apart from cash inflows in these two years, outflow amounting to 184.6 is found in the financial year 2017 clarifying that borrowings has increased and dividends are paid in more quantum, thereby decreasing cash. Besides this, by analysing opening and closing cash balance, it can be said that cash position is overall good of organisation.

    OTHER COMPREHENSIVE INCOME STATEMENT

    3. List each items of other comprehensive income statement

    Particulars

    2017

    2016

    2015

    Income

    125.2

    30.9

    32.1

    Other comprehensive income

     

     

     

    Items not to be reclassified to Profit and loss account

     

     

     

    Remeasurement of retirement benefits obligation

    12.7

    -17.4

    -1.1

    Income tax on above item

    -2.9

    2.6

    0.6

     

     

     

     

    Items to be reclassified to Profit and loss account

     

     

     

    Changes found in fair value of cash flow hedges

    28.6

    4.6

    -21.6

    Shares of income of joint venture

     

    -0.1

    0.1

    Income tax on item

    -6.8

    -2.1

    5.2

    Exchange differences of foreign business operations

    2.1

    -78.4

    89.2

     

     

     

     

    Other comprehensive income obtained (Net tax)

    33.7

    -90.8

    72.4

    Total comprehensive income available to owners

    158.9

    -59.9

    104.5

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