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Accounting and Reporting - Differences between net profit/loss and cash flows, Impairment of non-current assets, Ratio Analysis

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Added on  2023-06-18

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This report discusses the differences between net profit/loss and cash flows, Impairment of non-current assets, and Ratio Analysis in Accounting and Reporting. It also includes a discussion on which financial statement provides more useful and reliable information for investors. The report covers two companies, Funtastic Limited and Santos Limited, and provides insights into their financial performance. The report also includes references to relevant books and journals.

Accounting and Reporting - Differences between net profit/loss and cash flows, Impairment of non-current assets, Ratio Analysis

   Added on 2023-06-18

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Accounting and
Reporting
Accounting and Reporting - Differences between net profit/loss and cash flows, Impairment of non-current assets, Ratio Analysis_1
Accounting and Reporting - Differences between net profit/loss and cash flows, Impairment of non-current assets, Ratio Analysis_2
Contents
INTRODUCTION...........................................................................................................................................3
PART A.........................................................................................................................................................3
1. Identify the major three (3) reasons for both Santos Ltd and Funtastic Ltd for the differences
between net profit/loss for the year (income statement) and cash flows from operations....................3
2. Has the cash flows from operating activities increased or decreased from 2019 to 2020?.................4
3. Which section of the cash flow statements will you look at to assess the long run prospects of a
company?................................................................................................................................................5
4. Explain how the item “Impairment of non-current assets” will affect the cash flows from operating
activities calculation..................................................................................................................................5
5. Explain how the increase or decrease in Accounts receivable and accounts payable affect the cash
flows from operating activities under indirect method of preparing cash flows from operating
activities section......................................................................................................................................6
PART B.........................................................................................................................................................6
Ratio Analysis...........................................................................................................................................6
Discuss what is indicated by the profitability ratios and solvency ratios that you have
calculated.DotheseratiosprovideyouwithanypotentialredflagaboutFuntasticLtd?..................................7
PART D.........................................................................................................................................................8
Based on your examination of the income statements and cash flows statements-which one of the
two statements provides investors with more useful information? Which one provides with more
reliable information?...............................................................................................................................8
REFERENCES................................................................................................................................................9
Accounting and Reporting - Differences between net profit/loss and cash flows, Impairment of non-current assets, Ratio Analysis_3

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