Assessment of Cash Flow Statement of Three Companies

Corporate Accounting

Abstract
Present report provides detail assessment of cash flow statement of three companies i.e. Funtastic
Ltd, BHP Ltd. and Santos Ltd. Income Statement assists the company to identify their revenue,
expenses, and net profit or loss throughout the particular time. Cash flow statement prepared by
the company to know the actual position of the cash, with respect to the operational aspects,
investment aspects, and financial aspect. Further, Income Statement as well as financial
statement is very useful for the investors, by which they can analyze the performance of
company and make proper investment decision. The study revealed that BHP Ltd. and Santos
Ltd are financially strong in comparison to Funtastic Ltd.

Table of Contents
Introduction......................................................................................................................................4
Part A...............................................................................................................................................4
Part B...............................................................................................................................................6
Answer 1......................................................................................................................................6
Answer 2....................................................................................................................................16
Answer 3....................................................................................................................................18
Conclusion.....................................................................................................................................18
References......................................................................................................................................20

INTRODUCTION
Every company prepares the financial report for assessment of the financial performance of the
company. With this aspect, statement of cash flow is significant part of the financial statement of
the company (Reid, and Myddelton, 2017). Given study revolves around the content of
information provided in the statement of cash flows. Further, importance of statement for the
investors is also prescribed in this report. Along with this, report describes the several matters
related with the inflows and outflows of cash of three companies, namely Funtastic Limited,
BHP Limited, and Santos Limited. By observation of the cash flow statement, various aspect like
sources of cash in each firm, trend of cash flow, capability of the companies to generate the cash,
items which affect the cash flows, dividend trend, and others matters evaluated.
PART A
The income statement is prepared by the company for the ascertainment of profitability. It assists
the company to measure the performance by identification of the revenue, direct expenses, and
indirect expenses over specific period of time (Saleh, 2017). It also considers the non-cash
expenses incurred by company such as depreciation. Along with this, performance of the
company in the coming years and the capability of generating the cash flows of company also
determine by the income statement. It consists of the revenue, which are generated form core
business activities or other income (Wolf, Nabin, and Bhattacharya, 2018). It is considered as top
line. Further it takes into account the expenses, along with resulting Income or loss during a
particular time because of earning activities. The information content of profit and loss account
is as follows –