Cash Flow from Operating, Investing and Financing Activities of Wesfarmers Ltd

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COMMUNNICATION & LEADERSHIP

Communication and leadership
Cash flow from operating activities pertains to the net cash inflow in the initial section of the
cash flow statement. The cash flow from operating activities for the company projected to be
$4226 million in 2017 as against a figure of $3365 in 2016. Wesfarmers is engaged in various
kinds of business like supermarket stores, convenience and liquor (Wesfarmer, 2017). The
increment in the cash flow indicates the company has adequately performed the primary
industry. From the cash flow operating activities, it can be commented that the internal
solvency standard of the company is high. It is a significant indicator that the operations of
the company have provided sufficient cash flow to maintain the operating potential (Parrino,
Kidwell & Bates, 2012).
As per the annual report, it can be witnessed that the company invested a sum of $1681
million (Wesfarmer, 2017). PPE was purchased as well as sold. The investment made by the
company will help in ensuring liquidity and will provide better performance over some time.
Therefore, it can be commented that the cash was invested and hence, it will bring benefit to
the company in the long run (Porter & Norton, 2014).
When it comes to cash flow from financing activities, it can be observed that the dividend
paid in 2017 was $1998. Further, the borrowings of the company have declined. It had fallen
from a level of $1632 in 2016 to $1347 in 2017 (Wesfarmer, 2017). Financing activities can
be defined as the activities that result in an alteration in size, as well as the composition of the
capital of the owner and enterprise borrowings.
WESFARMERS LTD (WES) Statement of CASH FLOW
Fiscal year ends in June. AUD in millions except per share data. 2016-06 2017-06
Cash Flows From Operating Activities 3365 4226
Cash Flows From Investing Activities
Investments in property, plant, and equipment -1899 -1681
Property, plant, and equipment reductions 563 653
Acquisitions, net -747 923
Purchases of investments -49 -2
Sales/Maturities of investments 54
Net cash used for investing activities -2132 -53
Cash Flows From Financing Activities
Long-term debt issued 2360 220
Long-term debt repayment -1424 -1994
Common stock issued 1 1
Repurchases of treasury stock
Cash dividends paid -2270 -1998
Other financing activities
2