Analysis of cash Flows oci and Tax Expense Assignment
Added on 2021-05-31
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ANALYSIS OF CASHFLOWS, OCI AND TAXEXPENSEStudent Name: Student ID:
ContentsEXECUTIVE SUMMARY.................................................................................................................................2INTRODUCTION...........................................................................................................................................3DETAILS OF SELECTED COMPANY................................................................................................................4ACTIVITIES OF CASH FLOWS – STATEMENT ANALYSIS.................................................................................4Item Reported.........................................................................................................................................4Comparative Evaluation..........................................................................................................................6ANALYSIS OF OCI.........................................................................................................................................6Reported Details......................................................................................................................................6Description of Each head.........................................................................................................................7Different from Profit and Loss Account...................................................................................................7COMPANY’S INCOME TAX...........................................................................................................................7Tax Expense for Current Period...............................................................................................................7Accounting Income and Tax Rate............................................................................................................8Reporting of Deferred Tax Assets/Liabilities............................................................................................8Tax expense and Tax Payable..................................................................................................................9Tax Expense and Actual Tax Paid.............................................................................................................9Tax- Accounting Treatment Rating..........................................................................................................9CONCLUSION AND RECOMMENDATION.....................................................................................................9REFERENCES..............................................................................................................................................10EXECUTIVE SUMMARYCompanies are mandatorily required to prepare the accounting books and present the resultsthereon to the public including the stakeholders so that their needs can be satisfied andaccordingly the company can run in the future. In this report, the results have been detailed withrespect to the two statements – one is the statement of cash flows and other is the othercomprehensive income statement. The report it satisfy the three main purposes and each of it
have been followed throughout the report. The first purpose of the report is to discuss about theresults of the company through the cash flows generated and paid by the company. The secondpurpose of the report is to identify as to why the other comprehensive income are separatelyshown after the profit and loss account and why other classification have also been made in theannual report of the company. The third and the last main purpose of the report is to know theexpense which has been accounted for by the company for Income Tax and how the same havebeen dealt in the presentation of the financial statements. With these three purposes and to knowmore about the results of the company, the report is being prepared and provided with adequateheadings and sub headings. INTRODUCTIONThe mandatory preparation of the books of accounts and the financial statements thereon has notbeen casted by the statute only rather it is the basic need of every investor of the company tohave the full details of the results of the company and the same shall be monitored by thecompany on the regular intervals. The statement which provides the results of the company to theusers of its financial statements shall present the true and fair view otherwise the decision of theusers of the financial statements shall become meaningless. As the title of the report suggests the analysis of the cash flow statement, the statement showingthe other comprehensive income and the tax expense incurred by the company have beendetailed. The company that has been selected for the purpose of the report is Woolworths limitedand the annual report for the year ending 2017 has been considered. At first the statement of thecash flows has been discussed and how the same have represented the operations of the companyand details whether the company is generating the cash inflows or incurring the cash outflows.Each major as well as minor had been discussed in detail. Secondly the statement of the othercomprehensive income had been analysed as to how the statement is different from the normalincome and expenditure statement and the reason as to why it is being prepared and why thesome items of it has the effect of reversing in the future for and gets transferred to the statementof the profit and loss account. Thirdly the major head has been considered for the company
which is the tax expense which is mostly remains understood by the shareholders and thestakeholders of the company. With these views the report has then included the concluding paragraph and the set of thereference from where the data for report has been obtained. DETAILS OF SELECTED COMPANY The company that has been selected for the purpose of the report is the Woolworths Limited. Thecompany that has been selected is from Australia and is registered in the stock exchange ofAustralia. The company is into the retail industry since its inception which is hundred plus yearsago. The company has been into the activities of having the departmental store and the marketchains and provides all the home products and other related products and services at one placeand has provided the customers with the facility of getting all the things at once place. It hasbeen operating across Australia and New Zealand and most importantly it is the number twocompany in the retail sector. Its major competitor is Wesfarmers Limited. Its main focus is toincrease the customer base by providing the best services to the customers. With the retail sector,the report has been started and accordingly the annual report of the company as obtained fromwebsite has been considered for this report. ACTIVITIES OF CASH FLOWS – STATEMENT ANALYSISThe incoming and outgoing of cash has been detailed in the statement which is known as thestatement showing the cash flows. The incoming and outgoing has been identified and detailedunder the three major heads namely the activities relating to operating function, activities relatingto investment function and the activities relating to the financing function. The minor headsunder each of the above major head has been discussed below.
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