[Music] [Music] welcome students so we are in the process F C discussing the cash flow statement and in this process till my last part of discussion I was talking to you then we were learning to prepare the cash flow statement and we completed the half means third step but not completed the third step and that third step was the say preparing the final cash flow statement so we try to understand that how to prepare the cash flow statement under operating activities only and we tried to see that how much is the cash flow and miss whether it is a cash inflow or outflow the net result and that was the result we found that the company that this company skyla in India has net inflow of 80 lakh rupees that is the end result after tax means the total inflow after the tax was 80 lakh rupees which we could have and we could see that this influenced a sufficient in fluid the total resources of the company or the total funds of the company total investment by the company so that one year's cash flow is net cash flow from the operations is 80 lakhs so that was the first part we could do and now we'll be continuing with the with the remaining part of the final cash flow statement and then we'll have some analytical discussion so if you talk about this in that case you can say that next part is the cash flow from investing activities and then we'll be talking about the cash flow from the financing activities so if you talk about the cash flow from the investing activities again we prepare the statement here and then we take the important components into account how much is the cash flow from investing activities this is the final cash flow statement final cash flow statement India limited so we have here the if you talk about the details we are going to take here is that is the particulars and here it is amount right so we will write here for the reference that is the cash flow cash flow from operations or operating activities and this cash flow from the operating activities was how much this is 80 lakh that is after paying the tax we are having the positive inflow of 80 lakh rupees that is the cash flow from the operations now we will have the cash flow from investing activities this is the B part this is the a part this is the B cash flow cash flow from investing activities cash flow from investing activities and in this case you know that what are the divisions and what are the say activities which are cons considered as the investing activities you easily understand that investment means we make the investment in that say long term assets like a say plant building machinery they are the investment kind of the activities and for investment purpose so that the funds can be multiplied and the more investment can be generated they are called as a investing activities and more investment can be generated so this is one second is the real time investments you can see that if the form has surplus funds they can be invested in the market may be on the long term of the short term basis so if any investments are made in the market then yes we will have to take that into account and we will have to include that as the investing activities so any investment in the long term assets any investment in the long term investments real investments so they will be considered as the cash flow from the investing activities so when we will either safe assets long-term methods of the fixed assets cash will flow out and when we will sell these assets in the market cash will flow in similarly when the investments will be bought from the market or investments will be made in the market we will call them as a means as well causes the cash outflow but when these investments will be sold and converted into cash then they will be called as that they will be causing the cash inflow so that all kind of investments we are taking here into account and we will be considering those investments to investing activities and the details of investment investing activities of these and then after that we'll be talking with the financing activities where only there are the two broad sources one is the sure capital of financing the forms operations and second is the loans long-term loans so these are the broad funding sources so when the capital is sold in the market where the shares are sold in the market it causes the inflow and then the shares are bought back or redeemed it causes the outflow and similarly the long-term loans when we borrow money on the long term basis it causes inflow but when we return the loans so that that causes the outflow so it is only for the reference purpose but we will be talking about that third part later on currently we talk here about the cash flow from the investing activities so we had a detailed analysis in the previous lectures and after providing the basic cash flow statement we prepare the different notes which we call as schedules also and there we made a detailed analysis about all the assets we made the analysis of the fixed assets we made the analysis of say your work capital work in progress and we made the analysis of depreciation also so everything is done there and then we will be only talking about the cash inflow and outflow on account of the fixed assets similarly we talked about the investments also and we prepare the detailed notes and schedules you can refer to the previous lectures you will find out that what are the different schedules we have prepared and from those reduce we will have to pick up the information and will have to put it here but only this things will be taking we will be taking into consideration which are causing the cash for example we have seen that in skyline some assets are purchased before issuing the say they're shocked so after with the debentures suit means there is no inflow of the cash outflow of the cash the rentals have gone out and the fixed assets have con men so it means there is no change in the cash position so will not take that into consideration so similarly means the other important and here one say the machine was sold machine for for like rupees was sold that cumulative depreciation was three lakhs and when the machine was sold means the the residual value of the machine was one lakh rupees and a one lakh rupees the machine was sold for seventy-five thousand rupees and there was a loss of twenty five thousand rupees so that would be taken into account because there is it there is a inflow of the cash and the asset has reduced and the cash has come in so let's consider what are the important sources of cash inflow and the revenue is after outflow so Heston investing activity is the purchase of fixed assets such as of fixed assets and if you talk about this purchase of successors how much in behalf so means paid for seventy lakhs we have paid for the purchase of accessories 70 lakh certeza outflow this is the rupees in lakhs this is rupees in lakhs this is 70 lakhs which is all fixed asset that is 70 lakhs which means Cash's moved out similarly sale of the fixed assets so fixed asset has also been sold sale of fixed assets and how much was the received as a cash on sale that was seventy five thousand rupees was received as a sale proceed on sale off accessories similarly now we talk and there was nothing I think with regard to the fixed assets only the assets were purchased for 70 lakhs and then sold for four lakhs so four lakhs of the assets the calculator depreciation and depreciation was say three lakhs so we have to conclude that in the depreciation part because depreciation we has taken some twenty two point something so it means that is the total depreciation we have taken that into account and the sale of the fixed asset of four lakh rupees - depreciation of 3 lakhs one life is the balance and one lakh rupees of the asset is sold for how much seventy five thousand rupees so this is the interesting information only seventy five thousand rupees and then that 25,000 rupees loss which was there on the sale of excessive that is not that say when we recover that from the profit and loss account it means that is the operating inflow so I have taken that operating inflow there in the operating cash flows operating cash flow from the operating activities so we will not be taking that here into account on account of the sale effects assets we have received only seventy five thousand rupees points zero point seven five lakhs and that we are considering we are taking into account so it means there is a purchase of excessive sale of successors not purchase of long-term investments the chase of the chase of long term long term investments and if you talk about the chase of long term investments the figure we had calculated was fourteen lakhs then the investments are purchased it means the funds flow out and investment documents flow in so we have purchased the investments of the forty lakhs so we are considering those and then the sale of long term investments some long term investments were also sold in the market so it is sale of long term investments and if you talk about sale of long term investments then how much was this that is the sale of long term investment is twenty lakhs this is the 20 lakhs so we are given this total information here and you take this into account we will find out that with regard to investment some information is given long term investments I'm wanting to reach 40 lakhs for purchase during the year so we have taken that into account and investments were purchased sold for 20 lakh rupees so means if you go to that balance sheet here in the balance sheet we are given the investments figure and long-term investments if you look at we have this figure of long-term investments that is one zero five and it has come down to 99 so it means we had the total investment of what was the closing balance closing balance was one zero five and we purchase the investments for 14 lakhs here it means the total balance should have been one 119 lakhs but we are left with that 99 lakhs it means investments to the extent of 20 lakhs are sold in the market so we can easily verify this statement also this amount also then is the short-term investments we talk about the chairs off the chairs off short-term investments purchase of short-term investments and if you talk about the purchase of the short-term investments then it is how much it is we have a calculator already 21. 7 five lakhs if you talk about the short-term investments purchased so you can find out that is the total opening balance was twenty one point seven five and the closing balances forty three point five which means we have further purchased the investments for short-term investments for twenty one point seven five lakh so it is again verifiable then it was interest received interest received from the investments and that interest received is web already calculated we have seen the shedule number note number six and that was 12 lakhs interest and then other items with us are dividend received yes that dividend which we now say subtracted here if you talk about the operating cash flow from operating activities you can easily make out that you see there was interest in dividend income off that 15 lakh rupees so this interest is say did this dividend is now adding back this is say dividend received so dividend received this dividend he received is how much is the dividend received figure that is 10 lakhs didn't receive this plan lacks interest is 12 because we have taken this 15 into account in adjusting everything into the schedule so if you talk about the should you remember 6 you will find that the net in receipt of the interest is to relax so we have shown it here and then it is the see text on interest received tedious tax paid on interest received is 2 lakhs that is the tedious paid on interest received that is 2 lakhs so this is also a cash outflow in trust receive this so it means you can say that it is a flex deducted at source on interest received is ludicrous that is included in the current expenses that is included in the current explain the contacts expense so we subtracted it from there that we subtracted from there we have seen that the total income tax was coming out as 55 lakhs but their thing we have taken income tax as 53 lakhs so we have to add this figure of that 2 lakhs here because that belongs to the investing inflow and all from the operating in fluor nothing related to the tax so we have taken this into account so it means finally we have to know this is all is there nothing else is there so it means net cash inflow oblique outflow from investing activities from investing activities is how much we will have to now calculate it here and if you calculate this your taking this as the positive figures so this is the 180 lakhs is to be taken separate and if you are just this total is 65 lakhs and this 65 lakhs is the net result is the outflow on account of the investing activities the outflow is more than the inflow suit means net result is the outflow and that we have shown here that we have taken here into account that is the cash flow from investing activities now we talked about the cash flow from financing activities and this is C cash flow from financing activities so first one is the share capital because here we have only share capital and long-term loans nothing else share capital is how much share capital we have already calculated that is 12. 5 lakhs of that inflow other than she'll get to you but for the sources that is that secured and unsecured loans secured loans secured loans if you talk about the adventures dimensions have not caused any influence with you because they were issued for the purchase of fixed assets so will not take that into account so it means scalars this is the long-term lease and if you talk about this this was 12.
5 lakhs of the secured loans raised then we had the stolons raised and if amount of the if after that we'll continue the statement here repayment of repayment of secured loans and if you take the repayment of store loans here you'll be able to make out that how much deeper maybe I made for the secure loans here should new number is eight point two and this is seven that said early payment is made it is given to us also that the seven lakh rupees of the scalings have been repaid and then is that repayment of the unsecured loans repayment of unsecured loans repayment off unsecured loans and they are short term they are short term so how much the amount was we have already calculated short term loans and that is 2 lakh rupees so it is the negative figured it is going out so we have taken shown that as a outflow repayment of skilled she was a shield capital scared loans repayment of scared loans long tour DPM a disturbance can scale in short term then is an interest paid and interest paid on the loans interest paid is and then is the dividend paid interest and dividend paid other two other important components they are causing the outflow so interest paid is how much that is nine point seven five we have only calculated in that note you can refer to the detailed note and they dividend paid is 12. 5 again it is nine point five nine point seven five and then it is the dividend is 12-point dividend if you talk about here the dividend figure is that is 12. 5 is the payment we have made so these are the three payments continuously we have made then the corporate dividend tax paid corporate dividend tax corporate dividend tax paid and this corporate dividend tax if you talk about it is 1.
5 corporate dividend tax paid is the 1. 5 so I think this is that total net cash net cash inflow oblique outflow from financing activities from financing activities is how much if you calculate the net figure if you take into account outflow and inflow this works out as seven point seven five lakhs seven point seven five lakhs and then Network increase or decrease in cash net increase or decrease in cash from ABC that is operating investing and the financing activities and if we talk about this so if you take this how much is it t is the a then it is - it's a negative figure 65 and then it is seven point seven five so if you take this into account so this works out as 72 point seven five so it is 80 minus 72 point seven five so this works out as 0. 25 and it is seven so it is finally the net result is seven point two five so every point two five lakhs of the cash is the net result 7.
25 is that cash is the net result ad in this case if we talk about the in this if you talk about if you add ad opening balance of cash in this case if you add the opening balance of cash that is the how much it was two point seven five years 2. 75 so the closing balance of the cash is closing balance of cash here is that is ten lakhs closing balance of the cashes 10 lakhs if you go to the balance sheet here back to the balance sheet you will find here that is the closing balance of the cashier is that is ten lakh rupees this is the closing balance of Cash's ten lakh rupees so it means we have the ten lakh rupees of the closing balance of cash and it is verified that what is a position with regard to the cash from the operating investing and the financing activities now in this case if you analyze this cash flow statement and the position we have found out here you will be really finding it amazing that if you talk about the skyline because it's not one part is important that you have to calculate the figures and you have to make the cash flow statement that is the most typical part is the most difficult statement I would say and this is the most difficult part of the financial analysis even ratios are much better and easier to calculate but there also the the interpreter should be intelligent here in this case if both the things are say complex even preparing the cash flow statement is complex and when you interpret the cash flow statement then also you require some prudence or some that kind of the intelligence or the financial background as a financial analyst so you should become a good financial analyst after preparing the cash flow statement so now you look at these cash flows if you talk about the operations we have 80 lakhs but on the other two accounts the cash is flowing out it means the form is overall if related how to read about the financial performance of the form you should say the performance of the form is very good and the form has a very good bright effective future if you why I am saying like that because as I told you that point of decision making and a point of basis of decision making should be that you if it's a manufacturing firm it seems their skyline in the ICEA manufacturing firm and as I told you earlier also that the basis of analysis should be that in a manufacturing firm if that say operating structure is good but the financial structure is not that good no problem it will improve because a strong operating structure will improve that even weak financial structure but reverse should not be there a strong financial structure and it Vico operating structure that kind of the structures are not miss desirable it means that kind of the companies not have that good bright future so in this case if you talk about the skyline in India you see that the major source of the inflow or the cash is flowing in from the operations that is 80 lakh rupees cash has flown in from operations if you talk about the investing activities the company is buying the assets rather than selling them who sell the assets in the market whose financial position is not good but you are buying the assets and 70 what worth of 70 lakhs worth of the assets have been purchased by the company in the current here also so it means it's having the sufficient cash and that is purchased for cash so it means the company's having sufficient cash and another set of ash assets that is 50 lakhs has in purchase for Dementors also so it means somebody's ready to accept the dimensions of this company that's why he's supplying the assets he he's ready to become the lenders of lender of the company and 70 lakhs worth of the assets have been purchased for cash it means if the company has surplus cash and requirement for the use of the long term assets and capacity of use of fixed assets long term assets it means their operations will become further more stronger currently they are also strong but they will also improve and they will further become more stronger so even though investing activities are really good if you talk about the third part financing activities again we are finding that the net result is outflow so cash is flowing out and in this case how much cash is flowing out that is seven point seven five lakhs so they have generated funds by way of share capital and twelve point five lakhs came from the share capital they have taken loans also but you see the point of concern here is that the company has serviced their loans also on the time and without any default repayment of the secured loan has been made to the tune of seven lakhs maybe they were due and the company has paid them even the short-term loans for 2 lakhs have been paid so that's again a very good situation and then as the interest is also companies which means if you talk over that debt service coverage ratio of this company and the interest coverage ratio of the company that's really wonderful very good and company is able to service his debt also and pay the interest also and at the same time companies being the dividend though large chunk of the resolves they're reinvesting back into the business again is a very good strategy who can afford to reinvest back the profits and whose shareholders are allowing the company who are sure about that this company's future is bright this company's going to help us the better dividends better returns in the time to come so in that case means there's no problem so 25 lakh rupees have been used by the company for issuing the bonus shares they have benefited the shareholders also so relevant surplus are converted into share capital that is one positive strength positive point and other the shareholders are gaining by getting a dividend so in this year the shareholders have got two benefits one they got the bonus shares for 25 lakh rupees and another they have got the same dividend which is also half of the amout of that bonus shares that is kind of our retirement surplus converted into the bonus shares so again it's a very good feature and the corporate dividend taxes also companies pay so it means finally it is the 1.
