dfs dec 2009

taskey

task 1.7

how do they arrive at the answer for cash from operating activities, i am stumped.

thanks

Tracy

Rinske

That is what I calculated in 1.6:

6825 = Profit from operations
Adjustments:
(455) = Gain on disposal - deducted in the IS, but is an investing activity.
4398 = Depreciation - given in the question and just a book adjustment and no cash outflow.

91 = Trade and other receivables (decrease compared to last year, so more cash freed up)
(1638) = Inventories (increase compared to last year, so more cash tied up)
(546) = Trade and other payables (decrease compared to last year, so more cash paid)

(595) = Interest paid during the year, taken from the IS
(658) = Tax - last year's as that has been paid and this years tax is now a liability.

7422

Does this help at all?

taskey

Rinske wrote: »

That is what I calculated in 1.6:

6825 = Profit from operations
Adjustments:
(455) = Gain on disposal - deducted in the IS, but is an investing activity.
4398 = Depreciation - given in the question and just a book adjustment and no cash outflow.

91 = Trade and other receivables (decrease compared to last year, so more cash freed up)
(1638) = Inventories (increase compared to last year, so more cash tied up)
(546) = Trade and other payables (decrease compared to last year, so more cash paid)

(595) = Interest paid during the year, taken from the IS
(658) = Tax - last year's as that has been paid and this years tax is now a liability.

7422

Does this help at all?

yes it does, although looking through my papers now i am missing pages - about to go an reprint them all aarrgghh

stressed

tracy

Jimmyboy1888

Adlington Ltd
Reconciliation of profit from operations to net cash from operating activities
for year ended 31 October 2009

£ 000
Profit from operations 6,825
Adjustments for depreciation 4,398
Gain on disposal of property, plant and equipment (455)

Operating cash flows before movements in working capital 10,768

Decrease/(Increase) in inventories (1,638)
Decrease/(Increase) in trade receivables 91
(Decrease)/Increase in trade payables (546)

Cash generated by operations 8,675

Tax paid (658)
Interest paid (595)

Net cash from operating activities 7,422

Rinske

Don't stress, not helping. I'm sure you will be fine!