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Running head: CORPORATE ACCOUNTINGName of the StudentName of the UniversityAuthor note
1CORPORATE ACCOUNTINGCash flow Statement:Part 1:Codan Limited is a long time manufacturer as well as supplier of communicationsequipment’s, mining equipment’s and metal detection accessories. It earns an annual revenueof 132 million dollars. It is engaged in the business the supply of communicationsequipment’s. The cash flow statement is one of the most important tools of analysing thefinancial functioning of the company and all the stakeholders give their undue preference inthe cash flow statement for taking their investing decisions. On careful analysis of the cashflow statements of the past three years from 2017 to 2015, some important aspects have beenrevealed. The cash receipts are one of the most important aspects of any company’s cashflow, it has increased from 175,300 to 230,959 million in 2017. The cash paid to theemployees have also increased, from 125,369 to 153,060, indicating the recruitment of newemployees. There has also been a decrease in the amount of interest paid by the Codan,signifying a decrease of dependence on credit. The payments for intellectual property has alsoincreased from 1569 to 2905 million, signifying the company’s increased protection of itspatent and trademarks against competitors. The acquisition of various kinds of intangibleassets like computer software’s and various other licenses have also increased from 222million to 277 million dollars. For a company, which is actively engaged in radiocommunications and producing communications and metal detectors, usage of intangibleslike software’s are necessary.The financing activity denotes the fiscal activities of the company. The fiscal activities of anycompany form the most important activities of the company. Issuing of shares such aspreference shares and equity shares, payments of dividend form some of the most importantaspects of the financial activities of any company. It includes payment of dividends, issuing
2CORPORATE ACCOUNTINGshares for raising capital for expansion purposes or addressing the expenses of the company.A company cannot receive all the funds from its owners, as a result of which they issueshares to the general public. In return, the company is required to pay adequate dividends,which is actually the returns, provided by the company to the shareholders, who haveinvested their money into the company. In the case of Codan, repayments of the various kindsof borrowings have increased from 15,536 to 26,935 in 2017. This states that the companyhad taken a lot of borrowings for conducting its operations. Dividends are also an importantaspect .of any company’s financial activities, as it signifies the amount of returns provided tothe shareholder of the company in lieu of investing their money in the company. In case ofCodan, the dividend payment has increased from 7082 in 2016 to 17,724 in the year 2017.This proves the fact the company has increased the amount of dividend payments to itsexisting shareholders.Part 2:The cash flow statements of any business entity is mainly categorised in threedifferent kinds of segments or activities. They are the operating, investing and the financialactivities. Each of these activities form the crux of the financial health of the company. For adetailed analysis of each of these activities, a comprehensive graphical presentation of thecomparison has been provided below for the three year period from 2015 to 2017:
3CORPORATE ACCOUNTING(Source: Codan Ltd, 2018)When seen carefully, it can be deduced that the performance of the company’s cash flow hasbeen fluctuating in the period of the last three years. The cash flow from the operatingactivity has increased from the 2015 and the 2016 figures to75,580 million, which is apositive sign for the company. This is a result of the better management of the company. Thefinancing activities of the company has also taken an increase in the form of increase in thepayments of various of cash expenses, like payments of dividends and the increase in thepayments of the borrowings of the various kinds of loans and borrowings taken in previously.This is due to the exceptional performance in the operating frontier of the company, where anincrease in the amount of cash flow has resulted in the accumulation in the large amounts ofcash. This bodes well for the company and its set of investors and other stakeholders of thecompany. A company which pays timely dividends to its shareholders are good in retainingemployees and prospective as well as potential shareholders of the company. Theshareholders always want better returns from the company, where they invest their money.Codan has performed exceptionally by providing timely, accurate increased dividends.