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Cash Flow Statement Analysis

The document discusses cash flow statement analysis and methods for preparing a cash flow statement. It describes the direct and indirect methods for cash flow analysis and the three components of a cash flow statement: cash from operations, cash from financing, and cash from investing. It provides examples of items to include or deduct from profits under the indirect method. The document also advertises the PGPSE program offered by Afterschoool for social entrepreneurship training.

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3K views19 pages

Cash Flow Statement Analysis

The document discusses cash flow statement analysis and methods for preparing a cash flow statement. It describes the direct and indirect methods for cash flow analysis and the three components of a cash flow statement: cash from operations, cash from financing, and cash from investing. It provides examples of items to include or deduct from profits under the indirect method. The document also advertises the PGPSE program offered by Afterschoool for social entrepreneurship training.

Uploaded by

KNOWLEDGE CREATORS
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPS or read online on Scribd
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Cash flow statement

analysis
AFTERSCHO☺OL
– DEVELOPING CHANGE MAKERS
CENTRE FOR SOCIAL ENTREPRENEURSHIP
PGPSE PROGRAMME –
World’ Most Comprehensive programme in social
entrepreneurship & spiritual entrepreneurship
OPEN FOR ALL FREE FOR ALL

www.afterschoool.tk
02/03/09 AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 1
www.afterschoool.tk FOR PGPSE PARTICIPANTS
Cash flow statement
analysis
Dr. T.K. Jain.
AFTERSCHO☺OL
Centre for social entrepreneurship
Bikaner M: 9414430763
[email protected]
www.afterschool.tk, www.afterschoool.tk
www.afterschoool.tk
02/03/09 AFTERSCHO☺OL's
AFTERSCHO☺OL's MATERIAL
MATERIAL 2
www.afterschoool.tk FOR PGPSE PARTICIPANTS
What is cash?
• Cash or bank balance.

02/03/09 AFTERSCHO☺OL's MATERIAL 3


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Methods of cash flow analysis?
• 1. direct method
• 2. indirect method

02/03/09 AFTERSCHO☺OL's MATERIAL 4


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Direct method
• Here you have to take each item
individually and prepare cash flow
statement to show the net impact and
identify the flow of cash.

02/03/09 AFTERSCHO☺OL's MATERIAL 5


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Indirect method….
• Take profit from P & L account and adjust
it for non-cash items.

02/03/09 AFTERSCHO☺OL's MATERIAL 6


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Three componenents of cash flow
statement…
1. Cash from operations
2. Cash from financing
3. Cash from investing

02/03/09 AFTERSCHO☺OL's MATERIAL 7


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Cash from operations…
• Indirect method :
• Profit
• Add + all non cash expenses / provisions
etc.
• Less = all non cash income etc.

02/03/09 AFTERSCHO☺OL's MATERIAL 8


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Cash from financing
• If equity, debt, etc. increased, that means,
there is more cash from financing

• If equity, debt etc. decreased, that means


there is application of cash.

02/03/09 AFTERSCHO☺OL's MATERIAL 9


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Cash from investing….

• If fixed assets and investments increased,


it means, there is application of cash

• If fixed assets & investments reduced, it


means there is source cash and so cash
from investing should increase.

02/03/09 AFTERSCHO☺OL's MATERIAL 10


www.afterschoool.tk FOR PGPSE PARTICIPANTS
What to add to profit (indirect
method)?
• Depreciation
• Loss on sale of fixed assets
• Amortisation of intangible assets
• Impairment
• Bad debt
• Interest (it will go to cash from investing or cash
fro financing acticity)
• (all other non – cash expenses/ provisions).

02/03/09 AFTERSCHO☺OL's MATERIAL 11


www.afterschoool.tk FOR PGPSE PARTICIPANTS
What to deduct from profit (indirect
method)
• Profit on sale of fixed assets

02/03/09 AFTERSCHO☺OL's MATERIAL 12


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Example:
• Profit : 5000
• (after deducting salary 1000, purchase
15000, depreciation 1000, goodwill written
off 1000, rent 1000, wages 5000)
• Solution:
• Cash from operations (indirect method):
• 5000 + 1000 (dep) + 1000 (goodwill)
• = 7000 answer.
02/03/09 AFTERSCHO☺OL's MATERIAL 13
www.afterschoool.tk FOR PGPSE PARTICIPANTS
About AFTERSCHO☺OL
• PGPSE - World’s most comprehensive
programme on social entrepreneurship –
after class 12th
• Flexible – fast changing to meet the
requirements
• Admission open throughout the year
• Complete support from beginning to the
end – from idea generation to making the
project viable.
02/03/09 AFTERSCHO☺OL's MATERIAL 14
www.afterschoool.tk FOR PGPSE PARTICIPANTS
Branches of AFTERSCHO☺OL
• PGPSE programme is open all over the
world as free online programme.
• Those who complete PSPSE have the
freedom to start branches of
AFTERSCHO☺OL
• A few branches have already started -
one such branch is at KOTA (Rajasthan).

02/03/09 AFTERSCHO☺OL's MATERIAL 15


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Workshop on social
entrepreneurship
• We conduct workshop on social
entrepreneurship – all over India and out
of India also - in school, college, club,
association or any such place - just send
us a call and we will come to conduct the
workshop on social entrepreeurship.
• These workshops are great moments of
learning, sharing, and commitments.

02/03/09 AFTERSCHO☺OL's MATERIAL 16


www.afterschoool.tk FOR PGPSE PARTICIPANTS
FREE ONLINE PROGRAMME
• AFTERSCHO☺OL is absolutely free
programme available online – any person can
join it. The programme has four components :
• 1. case studies – writing and analysing – using
latest tools of management
• 2. articles / reports writing & presentation of
them in conferences / seminars
• 3. Study material / books / ebooks / audio / audio
visual material to support the study
• 4. business plan preparation and presentations
of those plans in conferences / seminars

02/03/09 AFTERSCHO☺OL's MATERIAL 17


www.afterschoool.tk FOR PGPSE PARTICIPANTS
100% placement / entrepreneurship
• AFTERSCHO☺OL has the record of
100% placement / entrepreneurship till
date
• Be assured of a bright career – if you join
AFTERSCHO☺OL

02/03/09 AFTERSCHO☺OL's MATERIAL 18


www.afterschoool.tk FOR PGPSE PARTICIPANTS
Pursue professional courses along
with PGPSE
• AFTERSCHO☺OL permits you to pursue
distance education based professional /
vocational courses and gives you support
for that also. Many students are doing CA
/ CS/ ICWA / CMA / FRM / CFP / CFA and
other courses along with PGPSE.
• Come and join AFTERSCHO☺OL

02/03/09 AFTERSCHO☺OL's MATERIAL 19


www.afterschoool.tk FOR PGPSE PARTICIPANTS

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