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The Company Selected for Evaluation of twelfth Corporate Accounting Company

   

Added on  2021-06-16

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Finance
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Running head: CORPORATE ACCOUNTINGCorporate AccountingUniversity NameStudent NameAuthors’ Note
The Company Selected for Evaluation of twelfth Corporate Accounting Company_1

2CORPORATE ACCOUNTINGTable of ContentsSolution i)...................................................................................................................................2Solution ii)..................................................................................................................................3Solution iii).................................................................................................................................5Solution iv).................................................................................................................................6Solution v)..................................................................................................................................6Solution vi).................................................................................................................................7Solution to vii)............................................................................................................................7Solution viii)...............................................................................................................................8Solution ix).................................................................................................................................8Solution x)..................................................................................................................................9Solution xi).................................................................................................................................9References................................................................................................................................10Appendix:.................................................................................................................................11
The Company Selected for Evaluation of twelfth Corporate Accounting Company_2

3CORPORATE ACCOUNTINGThe company selected for evaluating the yearly financial report is Wesfarmers Ltd that is anAustralian multinational that operates in the segment of retail, industrial and safety products,coal mining, chemicals as well as fertilisers. This company is listed in the Australian StockExchange (ASX) has an operating income of approximately AUD 3.61 billion, total assets ofAUD 0.78 billion and net income of AUD 2.35 billion. Solution i)The cash flow statement of the firm Wesfarmers Limited consist of conventional threesections namely cash flow from operational, investing along with financing activities. Inoperating actions, the cash flows are either provided by or utilized in primarily depreciation,definite adjustments to net earnings, alterations in accounts receivables, liabilities, inventoriesas well as alterations in diverse operating actions. As per the financial assertions of the firm,list of items under the operational activities include receipts of the firm from their customers,disbursements to diverse suppliers as well as employees, movement in particularly financeadvances as well as loans, firm’s dividends along with distributions accepted from associates,interests accepted, costs of firms borrowings together with payment of income tax(Schaltegger and Burritt 2017). Again, the exhaustive list of items mentioned under investingactivities includes disbursements for property, plant, and equipment (simply referred to asPPE) along with intangibles. Also cash used in investing functionalities comprise of proceedsfrom mainly sale or else disposal of the PPE, overall proceeds from disposal of businessesalong with associates, overall investments in mainly associates and varied joint arrangementsof the firm. Also, for the purpose of investing activities, cash is used for acquisition ofvarious subsidiaries and redemption of otherwise investment in loan notes (Siew 2015).Again, the list of items that are listed under the cash used for Wesfarmers financing activitiestake in proceeds of the company from borrowing, pay offs or in other words repayments of
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4CORPORATE ACCOUNTINGborrowed amounts and equity dividend disbursed. Also, cash is used for proceeds fromspecifically exercise of different in-substance options mainly covered in employee share plan.Solution ii)Analytical evaluation of the cash flow assertion of the firm Wesfarmers reveal that cashutilized for operative actions is documented to be AUD 4226 million in the year 2017 incomparison to the year ago figure that stood at approximately AUD 3365 million. Thus, itcan be seen that the cash flow from operating actions declined from AUD3791 in 2015 toAUD 3365 million in 2016 and thereafter again increased during 2017 (Wesfarmers.com.au2018). The increase in cash inflow during 2017 is mainly due to increase in receipts from thecompany’s customers, increase in interests received and at the same time decrease in costsincurred for borrowing and decrease in disbursements for income tax paid (Tschopp andNastanski 2014). Detailed study of cash utilized in investing activities reflect that cash outflow enhancedsharply from (AUD 1898 million) in 2015 to (AUD 2132 million) in 2016. However, itdeclined significantly to just (AUD 53 million) (Wesfarmers.com.au 2018). This is mainlydue to decrease in outflow of cash for payments for PPE, decline in outflow for acquirementof subsidiaries (net of particularly cash acquired) and at the higher inflow of cash fromproceeds from disposal of PPE and augmented proceeds from sale of mainly businesses aswell as associates.Again, it can be hereby observed that cash outflow for the firm Wesfarmers’s financingactivities decreased to (AUD 1333 million) in 2016 in comparison to the figure of (AUD3249 million) (Wesfarmers.com.au 2018). However, the same is observed to have againconsiderably increased to (AUD 3771 million). This is chiefly owing to the fact that proceedsobtained from firm’s borrowings decreased while pay off for the borrowings increased
The Company Selected for Evaluation of twelfth Corporate Accounting Company_4

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