Corporate Accounting: Role and Issues of Cash Flow Statements for BHP, Santos, and Funtastic Limited

Title
CORPORATE ACCOUNTING

INTRODUCTION
In the field of finance, there are a range of accounting approaches and
corporate accounting is one of them. It can be characterized as a form
of accounting which is associated with process of preparing final
accounts including cash flows, income statement etc. The PPT is based
on analyzing role and issues of cash flow statements for three separate
companies named as BHP limited, Santos limited and Funtastic
limited.

PART A (Review of information of
income statement and cash flow)
Income statement- It can be understood as a form of statement which includes information about
income and expenses during a particular time period (Güleç and Bektaş, 2019). This statement
includes such information:
 Sales revenue
 Cost of sales
 Operating income and expenses
 Interest expenses
 Tax-
 Net profit

CONTINUE
Cash flow- This is defined as a type of statement which consists detailed
information regarding to cash receipts and payments activities (NGUYEN
and NGUYEN, 2020). It is prepared by help of three activities such as
operational, financial and investing. It includes such information:
 Cash receipts
 Cash payments
 Net cash flow

Importance of both cash flow and income
statement for investors
Role of income statement for investors: The investors want detailed
information about company’s profitability and expenses during an
accounting cycle.
Role of cash flow statement for investors: The cash flow statement is
useful for investors to provide information about past years’ cash flow
that is used for making projection of upcoming cash flows.

PART (B) Examination of cash flow of
each company
(a) Major source and uses of cash of each firm.
BHP limited:Sources of cash:
Name of item 2017 (Data in $ million) 2018 (Data in $ million) 2019 (Data in $ million)
Profit/(loss) before taxation 10322 14751 15049
Cash generated from operations 19377 22949 23428
Dividends received 636 709 516
Interest received 164 290 443
Trade and other receivables 315 0 0
Inventory 0 0 298
Sale of assets 648 89 145
Trade and other payables 337 719 406
Interest bearing liabilities 1577 528 250
Divestment of subsidiaries 186 0 4
Royalty-related taxation refunded 501 17 59
Uses of cash
Name of item 2017 (Data in $ million) 2018 (Data in $ million) 2019 (Data in $ million)
Repayment of interest bearing liabilities 7120 4188 2604
Non-controlling interests 16
Purchase of shares by Employee Share Ownership Plan (ESOP) Trusts 108 171 188
Dividends paid (Financing activity) 2921 5220 11395
Dividends paid to non-controlling interests 581 1582 1198
Purchases of property, plant and equipment 4252 4979 6250
Exploration expenditure 968 874 873
Net investment 234 0 630
Trade and other receivables 0 662 211
Inventory 679 182 0
Other investing 153 141 289
Net income tax and royalty-related taxation paid 2585 4935 5999
Settlement of cash management related instruments 140 292 296
Interest paid 1149 1177 1346
Provisions and other assets and liabilities 325 7 125
Net finance costs 1304 1245 1064
Impairments of property 188 147 264
Depreciation and amortization expense 7719 6288 5829