Lecture-56- Cash Flow Statement- Further Analysis (Part-2)

[Music] [Music] [Applause] [Music] welcome students so we are in the process of preparing the cash flow statement and uh we prepared the first uh two uh schedules we verified first the amount of the reserve and surplus and we could make out that yes reserve and surplus is 119 not 94. 7 so that was verified but we will not be using that in the final cash flow statement because in the final cash flow statement we start with the profit before tax and the extraordinary incomes so but verification was important second we try to find out that say how much is the actual cash and flow on account of the share Capital so you not it down that is the that inflow is uh by 12 . 5 lakhs 12.

5 lakhs so we will be using this figure not the 12. 5 lakhs and this is under the financing and then second was the tax outflow on account of the tax was 53 lakh and that is the operating cash outflow so we'll be using this inflow and outflow figures not the raw figures which were used in the basic cash flow statement and we try to prepare the cash cash flow statement with the help of that we'll not be doing that now and uh so it means our two items we have worked out which are of use for the final cash flow statement what is the financing inflow on account of share Capital that is only 12. 5 lakhs 25 lakh uh worth of rupees bonus Shares are issued so no real increase in cash and in case of the tax we calculated by adjusting the opening and closing balances of the current and the defer tax we could make out that the total payment seems to have been made is of 55 lakhs but out of that 2 lakhs are paid as a uh uh as as a say TDS tax at the source it has been deducted by The Source who has paid the interest to the firm so that is 2 lakhs it means only 53 lakhs of the tax has been paid by the firm in the cash so this is the operating outflow so this is another figure we'll be using for preparing the final cash flow statement and now is the next schedule we are preparing that is the fourth schedule and that is for dividend analysis dividend dividend analysis so analysis means that is a dividend paid by the firm not received dividend paid by the firm so the analysis of the dividend paid so if you look at the dividend balance how much is the uh if you go to First you go to the balance sheet if you look at the balance sheet what is the balance in the de uh dividend account as a current liability if you look at the dividend balance is proposed dividend is was say uh 12.

5 uh lakhs proposed dividend previous year that was the proposed dividend 12. 5 lakhs so uh and the closing is 15 so it means 12. 5 lakh was outstanding to be paid in the previous year and how much dividend is declared in the current year we'll check for the dividend declared in the current year and dividend declared in the current year is uh proposed dividend is 15 for the current year it is 15 lakhs so total amount becomes due to be paid so it can call it as the uh dividend dividend outstanding at the beginning at the beginning of year dividend outstanding at the beginning of year is 12.

5 lakhs add add dividend declared during year dividend proposed dividend proposed during the year is how much that is 15 lakhs so total dividend payable total dividend payable in the current year is how much that is 27. 5 lakhs 27. 5 lakhs but how much is the still closing balance which is still outstanding if you look at the closing balance in the dividend account prop proposed dividend account that is 15 lakhs so it means less closing balance of dividend closing balance of dividend outstanding that is 15 lakhs it means actual div dividend paid during the year dividend paid dividend paid during the year is how much that is only 12.

5 lakhs and this is the outflow on account of dividend if you talk about the dividend outflow this is the 50 12. 5 lakhs 12. 5 lakhs that is on account of financing outflow that is the dividend outflow dividend outflow or outflow of the cash on account of the dividend is only 12.

5 lakhs it means we have paid in the current year the dividend paid which was proposed in the previous year which was outstanding at the begin of the current year that was 12. 5 lakhs but the dividend proposed in the current year that is 15 lakhs of the rupees that is still outstanding and that has not been paid so no cash outflow on account of that so we have to verify this way so it means we are now noting it down there that the cash outflow on inflow on account of share Capital financing activity is 12. 5 53 is on account of operations tax that is outflow and then it is the 12.

5 is the say uh dividend and then that is again the outflow so it is share Capital we'll write here share Capital then it is tax and then it is dividend these are the we are noting it down you can keep on noting it down so these are the three or the four figures we have worked out now we talk about the next thing that is uh dividend tax we'll be analyzing now the dividend tax how much cash outflow is there on account of the dividend tax uh how much is the corporate dividend tax uh you see that what is opening balance we'll go to the balance sheet so check there corporate dividend taxes what was the outstanding in the beginning 1. 5 how much is beginning in the at the end of the current year 1. 8 so we'll write here corporate dividend tax next schedule this is a schedule number five note number five or schedule number five that is the corporate dividend tax analysis corporate dividend tax analysis and if you make this analysis we will find out that the corporate dividend tax is that is uh outstanding corporate dividend tax outstanding at the beginning at the beginning of the year corporate dividend tax outstanding at the beginning of the year is uh that was 1.

5 that is 1. 5 lakhs and how much it is declared corporate dividend tax declared in the current year that is the current income tax defer income tax and then the proposed dividend and corporate dividend tax that is 1. 8 proposed during the year add proposed add proposed during the year and that is 1.

8 so total due total due is how much total corporate dividend tax due is that is 0 3 and then it is 3 total is 3. 3 so uh less outstanding at the end of the year outstanding at the end of year is how much 1. 8 so it means corporate dividend tax paid during the year is that is only 1.

5 lakhs corporate dividend tax paid during the year is 1 . 5 lakhs and this amount is 1. 5 lakhs this is Corporate dividend tax and then it is financing outflow this is the another outflow we are going to make use of another outflow we are going to make use of that is the corporate dividend tax which is now to be taken into account and the cash flow outflow on account of the corporate divident tax is this much now we take the next schedule and when you talk about the next schedule the sixth schedule is that is the interest income we have talked about the interest income and interest expense so we will be now taking up the interest income and the interest expense and in this case we'll be preparing the schedule for interest income and interest expense so let's check the schedule number six that is note number six or schedule number six that is interest income interest income interest income analysis interest income analysis and if you look at the interest income analysis that is uh interest income analysis how much is the interest income is there any uh interest receivable here as a asset if you talk about the interest receivable uh let's check the interest receivable anything is that is the TS sunry datas yes interest receivable is there interest receivable in the beginning was how much interest receivable in the beginning was beginning of the year is that is 2 lakhs and now it is the closing balance is 5 lakhs it means interest receivable at the beginning of year that is how much interest receivable at the beginning of the year is how how much that amount is uh 2 lakhs that amount is 2 lakhs interest earned interest earned during the year interest earned during the year is how much interest earned during the year is interest income we'll be talking about here is the interest income and this is 15 lakhs interest earned during the a is 15 lakhs this is 15 lakhs so it means total interest due in the current year is how much 17 lakhs so less interest receivable at the end of year at the end of year how much it is that is 5 lakhs it means interest received during the year interest received during the year is during the Year 2007 is how much it is 12 lakhs interest worth of 12 lakhs is received and this is the interest that is 12 lakhs will be taking here 12 lakhs and it is on account of Interest trust and this is the inflow financing inflow you can say this is the financing inflow this we are going to take it as the fifth figure apart from the other figures in the final cash flow statement in the final cash flow statement and now we talk talk about the analysis of the interest payable interest payable next is a note number or the schedule number seven so interest payable interest we make the analysis of the interest payable so interest payable is let's check the interest payable go to the liability side in the balance sheet if you go to the liability side in the balance sheet you'll find here that is the interest payable is current liabilities yes it is a interest payable so how much interest was payable in the beginning if we take the current liabilities the interest payable in the beginning was interest payable that is five how how much is this left 2.

5 so start here like this interest payable balance payable in the beginning of year in the beginning of year that is how much it is 5 lakhs and now in interest payable during the year interest payable during the year it is how much interest payable during the year is we'll have to check for this in the where it will be available in the profit and loss account so interest payable during the year is in the profit and loss account and interest expense is how much this is I think 7. 25 is the interest payable during the here that is 7. 25 so total interest due total interest due for the year is how much 1225 lakhs out of this even due at the end of the year is how much interest due at the end of the year is interest payable is 2.

5 2 Point interest payable interest payable at the end of the year at the end of year is 2. 5 so how much is actually paid 9. 75 interest paid during the year is 9.

75 this is the next item 9. 75 interest just paid and this is the on account of the loans so it is the financing outflow that is the outflow it is financing and this is outflow interest paid is 9. 75 you'll be taking this item of outflow also into account this is another item so we have dealt with the seven schedules so far we have prepared the seven notes so far and then we'll be preparing the remaining notes also so number one is that we'll have to make the analysis of additional information which is given to us and then we'll have to check the other items of inflow and outflow where we have the opening and closing balance and then finally we will have to arrive at the operating investing and financing outflows or the inflows so this is we have already prepared the interest expense we have also done so the seven schedules are ready and we have got the six balances because we are not going to get the balance on account of the share Capital we are not going to take that into account so now the next thing is uh that is the so we have adjusted this first point that is a share Capital we have adjusted the interest component also that is the uh total when we talk about the last year's outstanding dividend dividend tax were paid during the we have done this adjustment also then we have uh interest part also we have already done out of the interest income 15 lakhs 10 lakhs were actually received during the year and 2 lakhs for this so we have Al also adjusted this and uh on account to the interest expense that is 7.

2 L5 lakh 4. 75 lakhs were paid during the year and 5 lakhs relating to the interest uh of expense were paid so total amount paid is how much it says that it is 4. 75 + 5 so it is again the 9.

75 we have calculated so we have verified this point also so the total information given as additional information we'll have to take them that into account and we'll have to check for that whether this information taking this information into account the inflow and outflow figures are balancing or not so this is the detailed analysis now we go for the say analysis of the uh long-term loans so we have two kind of the long-term loans that is the say we are given here 12% Dentures were issued in Le of the fixed asset so we have to make analysis of it and we'll have to go for the long-term secur loans that is of 12. 5 lakhs were raised during the year so we'll have to check this so it means the now the analysis of loans and this is a schedule number eight schedule number eight note number eight or schedule number eight that is the analysis of of loans analysis of loans so if you make the analysis of loans here so how much loans we are looking at go to the balance sheet how much balance we can find out in the balance sheet in the balance sheet the loans balance is given to us is how much is the Denture especially zero in the opening balance is zero so raised during the year is 15 lakhs raised during the a is 15 lakhs so debentures issued during the year that is for 15 lakhs and finally the last Point says that how much fixed assets are purchased for how many debentures that is the 12% and dentur were issued in Le of the fixed assets it means fixed assets purchased for debentures that is again same amount 15 laks so it means cash outflow uh sorry inflow from debentures cash inflow from debentures is nil nothing will come there cash and flow on account of the Dentures will be nil because we have given the dentures and we have received the fixed assets from The Firm to whom the Dentures have been given this is the one part second part of the loans is other loans second analysis of the loans is other loans and when you talk about the second part of the loans is other loans says that long-term secured loans others of R 12 . 5 lakhs were raised during the year so let's check the balance of the other loans go to the balance sheet if you go to the balance sheet here you will check the balance here and that is how much the loans component other loans yes long-term loans we'll have to talk about here that is initial opening balance was 44 lakhs opening balance opening balance is how much it is 44 lakhs and how much uh loans raised during the year is 12.

5 so it means uh and the closing balance is uh 49. 5 it means the actual inflow is on that is only 12 5. 5 so where is the other amount has gone too here it is written that long-term secur loans of rupees 7.

5 lakhs were raised during the year and uh long-term Investments were this last year's outstanding dividend was this miscellaneous expenditure is this so it means if you talk about the total loans component and the loans part we'll have to see here that the total loans are the opening balance is 44 are raised during the year Yes Loans raised during the year is 12. 5 12. 5 it is 1 it is 6 and it is 56.

5 and if you talk about the closing balance it is 49. 5 let's closing balance of loans is 495 49. 5 lakhs it means loans raised in cash loans raised in cash is how much cash out inflow on account of the loans is that is 7 lakhs that is 7 lakhs it means only 7 lakhs of the loans are raised in cash other loans may be raised in kind and that information is not available so we'll have to check for that information also that where that other loans are there and how much cash INF flow has been on account of the loans it could be that part of the loans have also been paid also and if you talk about that loans paid during the a that is the 7 lakh so in case in terms of the cash we are able to find out that the loans are raised in cash are only 7 lakhs so it means uh cash inflow that is a financing inflow is only 7 lakhs on account of loans and that is financing loans uh inflow or a cash inflow on account of the loans that is the 7 lakhs of the inflow has come to the the form is that is on account of this and that is the financing inflows so here we will have to find out that if you talk about the schedules we have prepared the schedules so far for the loans and then for the uh other loans and then we have done this analysis also so we have finished the schedules that is total number of schedules we have finished so far is the eight schedules we have prepared so far and now we'll be talking about the other schedules so if we talk about the other schedules we'll be talking here other schedules with regard to the assets now we have to talk with the fixed assets and uh schedule number nine is here that is for the fixed assets so here it is the fixed assets shedule or the note number nine is fixed assets fixed assets this is the schedule number nine so if you look at the schedule number nine that is fixed asset schedule we'll see here that uh what is the balance given in the balance sheet balance given in the balance sheet is that is fixed assets gross block is 95.

5 Vols the opening balance and gross block is 174 so it means you can call it as that is a addition to the fixed assets is addition in the fixed assets during the year during the year are how much addition in the fixed assets during the year is is how much that is if you take it 95 so it is 4. 5 and 74 78. 5 it is 78.

5 lakhs birth of 78. 5 lakhs of the fixed assets are raised during the year and then we talk about uh assets sold during the year so it means add assets sold during the year during the year is for 4 lakhs so total assets were in the during the year is that is 825 lakhs these are the 82. 5 lakhs of the assets are there with us and in addition to the capital work in progress we'll have to go for now the next thing that is if you look at the addition to the fixed assets here it is written that from the balance sheet we could find out that it is 78.

5 lakhs of the assets have appreciated and assets with original cost of 4 lakhs and accumulated appreciation of 3 lakhs were sold during the year so that was also there during the year so total assets during the year were 82. 5 lakhs and now now we have to talk about the increase in capital work in process how much that increase is there in the capital working process if you look at the capital working process then you will find Capital work in process is here if you talk about the capital work in process this is 2. 5 and it has become five so it is 2.