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Corporate Accounting : Assignment

   

Added on  2021-06-16

11 Pages2613 Words21 Views
FinancePolitical Science
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Running head: CORPORATE ACCOUNTINGCorporate AccountingName of the Student:Name of the University:Author’s Note:Course ID:
Corporate Accounting : Assignment_1

1CORPORATE ACCOUNTINGCash flow statement:Question (i):The cash flow statement is a significant financial statement of an organisation, whichdepicts the way the changes in the accounts of the balance sheet statement and incomestatement influence cash and cash equivalents. The assignment aims to provide criticaloverview of the main items listed in the cash flow statement of Retail Food Group. There arethree major items listed in the cash flow statement of Retail Food Group (RFG) listed inASX, which are discussed as follows:Net cash flows from operations:This section contains four major items for RFG, which are customer receipts, supplierand staff payments, interest payment and others (Rfg.com.au 2018). The customer receiptsindicate those amounts received where sales are made previously on credit (Armitage, Webband Glynn 2016). In case of RFG, this amount is observed to increase significantly for theyear. This is because the organisation has made more credit sales. Similarly, supplierpayments denote the amounts settled for the products, which were bought on credit. It hasincreased for RFG over the years due to additional purchases for meeting the rising consumerdemand. Interest payments are those amounts that RFG needs to pay on the short-term loansundertaken. This has increased in 2017, since it has raised loans for buying additionalinventories (Beekes, Brown and Zhang 2015).Net cash flows used in investing activities:RFG records certain items under this head in the cash flow statement of theorganisation and they are described effectively. Payment for plant and equipment is themoney incurred for buying and acquiring these items. Increase in this item could be observed
Corporate Accounting : Assignment_2

2CORPORATE ACCOUNTINGin 2017, since RFG has laid stress on increasing its asset base. Due to this, lower proceedsfrom this item have been generated in 2017. The intangible asset payment signifies themoney that RFG has incurred in order to acquire intangible assets (Benson et al. 2015). Thisamount has decreased slightly in 2017. Finally, interest payment is the sum received asinterest from investments made. Since RFG has realised adequate cash flows from the capitalinvested in various projects, this item has increased considerably over the year. Net cash flows used in financing activities:There are various items that are disclosed under this section of the cash flowstatement for RFG and the most significant items constitute of the following:Share issueAmount gained from borrowingsAmount paid for borrowings (Ali 2016)Payment related to issue of debt and shareThe share issue signifies the amount earned by the organisation by accumulating fundsfrom the equity shareholders (Ball et al. 2016).$35,600,000 has been earned by issuingshares in 2017; however, nothing was earned in 2016 as proceeds from this issuance. Theborrowing proceeds have increased in 2017 due to increased investment. This is because ithas adopted the strategy of repaying its borrowings from 2015. Finally, increase in dividendpayments could be identified over the years with the rise in net earnings of the organisation.
Corporate Accounting : Assignment_3

3CORPORATE ACCOUNTINGQuestion (ii):201720162015$-250,000 $-200,000 $-150,000 $-100,000 $-50,000 $- $50,000 $100,000 $150,000 $200,000 Comparative analysis of cash flow statement of Retail Food GroupCash Flow Operating ActivitiesCash Flow Investing ActivitiesCash Flow Financing ActivitiesFrom the above figure, it could be evaluated that there is significant rise in net cashflows from operations from 2015 to 2016. However, a marginal decline could be observed inthe year 2017. This is because of the rise in customer receipts coupled with rise in supplierpayments. As RFG has made additional payments for acquiring new assets like equipmentand other intangibles, additional cash flows from investments are observed to increase in2017. However, decline is inherent in 2017 due to higher proceeds earned from these assets.Along with this, decline in net cash flows from financing activities is evident; howeverpositive increase is found in the later year. This is because RFG has experienced raisedproceeds from share issuance, borrowings and others. Therefore, it could be inferred that bothincrease and decrease could be observed in the various categories of cash flow statement ofthe organisation.
Corporate Accounting : Assignment_4

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