Financial Statement Analysis and Cash Flow Evaluation for A2 Milk and Vulcan Energy Resources Ltd

7702AFE Accounting and
Reporting

TABLE OF CONTENTS
PART A..........................................................................................................................................3
1...................................................................................................................................................3
2...................................................................................................................................................3
3...................................................................................................................................................3
4...................................................................................................................................................3
PART B FINANCIAL STATEMENT ANALYSIS ......................................................................4
1) ratio analysis...........................................................................................................................4
2. Trend analysis.........................................................................................................................6
C) Synthesis-income statement, balance sheet and cash flows statement..................................8
Part D Profit or cash flows..........................................................................................................8
Part E...........................................................................................................................................9
REFERENCES..............................................................................................................................10

PART A
1
The reason for difference in net profit and cash flow from operation for Vulcan is as
follows-
 The reason is that company’s revenue has reduced to a great extent.
 Another reason for changes in cash flow from operations is the high increase in interest
received and the increase in payment made to supplier and employers.
 Another reason was increase in expenses as well and it resulted in loss for the company.
Reason for decline in performance of A2 Milk is as follows-
 There was a drastic decline in the net sales of the company as compared to the last year.
 Also the total expenses of the company have also increased and this resulted in decline in
profits of company.
 Also, the reason for huge decline in net cash from operating activity is that receipt from
consumer declined and the taxes paid were also reduced.
2
The net cash flow from operating activity for A2 Milk has reduced as compared to last
year performance. this is particularly because of the reason that receipt has declined and also the
interest paid increased and interest received decline (Jadhav, 2019). On the other hand, in case of
VUL the cash used has increased to a great extent. this increase was there because the payment
has increased to a great extent.
3
For the analysis of the company on basis of long run prospects, the analysis of cash flow
from operating activity is being analysed.
4
In case of account receivable, a positive number outlines the use of cash and resultantly
cash flow is decline whereas the negative change in number of receivable results in increase in
case. Similarly, in case of decrease in account payable means outgoing of cash and when account
payable increases then it is considered as cash inflow.