Cash flow statements, Financial Management

Assignment Help:

Cash flow statement:

The cash flow statement summarises the flow of cash into and out of the business over a certain period of time.

The cash flow statement measures the liquidity of the business (its ability to meet its debts in a timely manner).

The cash flow statement is one of the key financial statements for management accounting and is the primary statement managers would utilise in for the day to day running of the business.

A typical basic cash flow statement could look like the following:

Item Description

Jul

Aug

Sep

Oct

Nov

Dec

Receipts

 

 

 

 

 

 

Prof Fees / Commissions

32,000

36,000

38,000

30,000

40,000

38,000

Owner's Funds

 

20,000

 

 

 

 

Bank Loans

 

 

 

30,000

 

 

Total Receipts

32,000

56,000

38,000

60,000

40,000

38,000

 

 

 

 

 

 

 

Payments

 

 

 

 

 

 

Advertising

8,000

6,000

8,000

9,000

5,000

4,200

Wages

20,000

21,000

22,000

24,000

21,000

23,000

Telephone

3,000

 

 

4,000

 

 

Taxes

 

 

 

 

28,000

 

Other

10,000

11,000

12,000

15,000

10,000

13,000

Total payments

41,000

38,000

42,000

52,000

64,000

40,200

Net monthly movement

(9,000)

18,000

(4,000)

8,000

(24,000)

(2,000)

Opening Cash Balance

(4,000)

(13,000)

5,000

1,000

9,000

(15,000)

Closing Cash Balance

(13,000)

5,000

1,000

9,000

(15,000)

(17,000)


Related Discussions:- Cash flow statements

Determine the proportion of debt and equity, Q. Determine the proportion of...

Q. Determine the proportion of debt and equity? Financing Decision: - This function is related to increasing of finance from different sources. For this reason the financial ma

Operating cycle, discuss the applicability of an operating cycle of a veget...

discuss the applicability of an operating cycle of a vegetable growing business

Illustration of total return on investment, Illustration  An inve...

Illustration  An investor with a 1-year investment horizon purchases a 20-year 5% corporate bond. The prevailing price of the bond is Rs.82.3488 for a yield of 6.2%

Empirical measurement of liquidity, Empirical Measurement of Liquidity: Th...

Empirical Measurement of Liquidity: The number of days a particular share is being traded reflects the liquidity of the market. If it is traded actively on 50% of the days when th

Explain the sharpe performance measure, Explain the concept of the Sharpe p...

Explain the concept of the Sharpe performance measure. Answer:  The Sharpe performance measure abbreviated as SHP is a risk-adjusted performance measure. It is denoted as the mea

Mba 7200, nd held it until it matured, what annual rate of return would she...

nd held it until it matured, what annual rate of return would she have earned? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16

Annual tax shield, What is the annual tax shield to a firm that has total a...

What is the annual tax shield to a firm that has total assets of $80 million and a net worth of $55 million, if the average interest rate on debt is 8.5% and the marginal tax rate

Accounting framework - convention of disclosure, Accounting Framework - Con...

Accounting Framework - Convention of Disclosure The doctrine of disclosure suggested in which all accounting statements should be honest and to that end, full disclosure of al

What are the drawbacks of the payback, The drawbacks of the payback approac...

The drawbacks of the payback approach are as follows - Payback ignores the overall profitability of a project by ignoring post payback cash flows. In the illustration above the

Advantage of profitability index method, Q. Advantage of Profitability Inde...

Q. Advantage of Profitability Index method? Advantage of PI method:- (i) Similar to the other DCF techniques the PI method as well takes into account the time value of money

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd