CORPORATE ACCOUNTING CORPORATE ACCOUNTING CORPORATE ACCOUNTING Name of the university Student ID
Added on 2021-05-31
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Finance
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Running head: CORPORATE ACCOUNTINGCorporate accountingName of the studentName of the universityStudent IDAuthor note
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CORPORATE ACCOUNTING1Table of ContentsAnswer (i)...................................................................................................................................2Answer (ii).................................................................................................................................3Answer (iii)................................................................................................................................4Answer (iv).................................................................................................................................4Answer (v)..................................................................................................................................5Answer (vi).................................................................................................................................5Answer (vii)...............................................................................................................................5Answer (viii)..............................................................................................................................6Answer (ix).................................................................................................................................6Answer (x)..................................................................................................................................6Answer (xi).................................................................................................................................7Reference....................................................................................................................................8
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CORPORATE ACCOUNTING2The ASX listed company XERO Limited offers the platform for the online accountingand the business services for the small scale business entities. The company provides XEROsoftware that is service software and it can be accessed from internet cloud through thestandard browser (Xero Accounting Software 2018.). The objective of this report is toanalyse the company’s cash flow statement, balance sheet and other comprehensive incomestatement for last 3 years that covers 2015, 2016 and 2017.Answer (i) Looking into the annual report of XERO Limited it is recognised that the company’scash flow statement is divided into 3 parts – cash flows from operating activities, cash flowfrom investing activities and cash flow from financing activities. Net cash flow or cash used in operating activities – this includes all the cash flows orthe cash used in the operational activities of the company like payment of tax, receiptof interest and payment made to suppliers. Generally the operating activities of thecompany includes the non-cash expenses like depreciation, net income and changes inthe working capital (Chang et al. 2014). There is significant decrease in the cashflows from operating activities of the company over the years from 2016 to 2017. Thereason of decrease was that the receipts from the customers in the year 2017 weresignificantly high if it is compared with the receipts of the year 2016. Net cash used in or provided by the investing activities – cash flow from investingactivities records the cash generated from or cash used in the investing activities ofthe company (Sarfaty 2015). Financing activities of XERO Limited includescapitalised cost for development, cost of rental bonds and amount spend forpurchasing plant, equipment and property. Net cash provided by or used in the financing activities – cash flow from financingactivities records the cash generated from or cash used in the financing activities of
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CORPORATE ACCOUNTING3the company. Financing activities of XERO Limited includes proceeds from andpayments towards short-term deposits and repayment of the management loan.Answer (ii)Particulars2017($'000)2016($'000)2015($'000)Netcashusedinoperatingactivities -4,401.00 34,770.00 -38,623.00 Netcash(usedin)/providedbyinvestingactivities -66,430.00 -53,820.00 -49,758.00 Netcashprovidedby(usedin)financingactivities60,057.00 66,241.00 132,154.00 2017 ($'...2016 ($'...2015 ($'...-100,000...-50,000...- 50,000...100,000...150,000...Net cash used in operating activities Net cash (used in) / provided by investing activities Net cash provided by (used in) financing activitiesOperating activities – operating cash usage of the company over the past 3 years arein decreasing trend. It can be observed from the above presented graph and table thatthe cash used for the operating activities of the company reduced from $ 38,623thousand to $ 34,770 thousand over the years from 2015 to 2016. However, itsignificantly reduced to $ 4,401 thousand in the year 2017 as the company received $288,448 thousand from the customer during the year (Xero Accounting Software2018).
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