Introduction - Cash Flow Statement | Crash Course of Accountancy - Class 12 - Commerce PDF Download

 Page 1


 
    
 
 
 
 
Meaning of cash flow statement 
A Cash Flow Statement is a statement that shows the flow of cash and cash equivalents during a period. It traces the flow 
of cash and cash equivalents into and out of the business during an accounting period. 
• Inflows of Cash: All transactions that lead to increase in cash and cash equivalents are classified as inflows of cash. 
• Outflows of Cash: All transactions that lead to a decrease in cash and cash equivalents are classified as outflows of cash. 
 
Examples of Inflows of Cash and Outflows of Cash 
Inflows of Cash Outflows of Cash 
Cash Sales Cash Purchases 
Cash Received against Trade Receivables Cash Paid against Trade Payables 
Cash Received for Interest, Commission, etc. Cash Paid for Expenses. 
Cash Received from Sale of Fixed Assets Cash Purchase of Fixed Assets 
Cash Received against Loans and Advances Loans and Advances given 
Proceeds from Issue of Shares or Debentures Cash paid to Redeem Preference Shares or 
Debentures 
 
The objectives of Cash Flow Statement are as follows; 
1. To ascertain net Cash Flows from Operating, Investing and Financing Activities of an enterprise. 
2. To ascertain the Net Change in Cash & Cash Equivalents indicating the aggregate of net Cash Flows from Operating, 
Investing and Financing Activities of an enterprise between the dates of two consecutive balance Sheets. 
 
The major limitations of Cash Flow Statement are as follows;  
1. Ignores non –Cash  
    Transactions 
It ignores the non-cash transactions. In other words, it does not take into 
consideration those transactions which do not affect the cash For 
Example, issue of Shares against the purchase of Fixed Assets or Stock-
in-trade, Conversion of debenture into Shares. 
2. Secondary Data  
    Based Statement 
It is a secondary data based statement. It merely rearranges the primary 
data already appearing in other statements viz., Income Statement and 
balance Sheet. 
3. Historical 
Statement 
It is basically historical in nature because it is prepared on the basis of 
Historical Financial Statements. 
4. Ignores Accrual 
Concept 
It ignores the Fundamental assumption of Accrual. 
The various uses of cash Flows Statement are as follows; 
1. Facilitates to ascertain net cash flows: Cash Flow Statement facilitates to ascertain Net Cash Flows from operating, 
Investing and Financing Activities and Net Change in Cash and Cash Equivalents. 
2. Facilitates to evaluate Cash Financial performance: It facilitates to evaluate Cash Financial Performance by providing 
information on net Cash flows from Operating Activities. 
3. Facilitates to evaluate Cash Financial Position: It facilitates to evaluate cash Financial position by providing information 
on Net Cash flows from investing Activities and Financing Activities. 
4. Facilitates Efficient Cash Management: The management can know the situation of shortage or surplus cash and can 
plan for the effective use of surplus cash or can make the necessary arrangement in case of an short age of cash. 
5. Facilitates Comparison: It facilitates the comparative study of the operating performance of different enterprises 
because it eliminates the effects of using different accounting treatments for the same transactions and events. 
Facilitates Capital Budgeting Decisions: It facilitates Capital budgeting Decisions by providing information on net Cash 
Flows from Investing Activities 
 
Operating Activities are the principal revenue-producing activities of the enterprise and other activities that are not 
investing or financing activities. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Goods 
2. Cash received from Trade Debtor 
1. Cash Purchases of Goods. 
2. Cash paid to Trade Creditors. 
Page 2


 
    
 
 
 
 
Meaning of cash flow statement 
A Cash Flow Statement is a statement that shows the flow of cash and cash equivalents during a period. It traces the flow 
of cash and cash equivalents into and out of the business during an accounting period. 
• Inflows of Cash: All transactions that lead to increase in cash and cash equivalents are classified as inflows of cash. 
• Outflows of Cash: All transactions that lead to a decrease in cash and cash equivalents are classified as outflows of cash. 
 
Examples of Inflows of Cash and Outflows of Cash 
Inflows of Cash Outflows of Cash 
Cash Sales Cash Purchases 
Cash Received against Trade Receivables Cash Paid against Trade Payables 
Cash Received for Interest, Commission, etc. Cash Paid for Expenses. 
Cash Received from Sale of Fixed Assets Cash Purchase of Fixed Assets 
Cash Received against Loans and Advances Loans and Advances given 
Proceeds from Issue of Shares or Debentures Cash paid to Redeem Preference Shares or 
Debentures 
 
The objectives of Cash Flow Statement are as follows; 
1. To ascertain net Cash Flows from Operating, Investing and Financing Activities of an enterprise. 
2. To ascertain the Net Change in Cash & Cash Equivalents indicating the aggregate of net Cash Flows from Operating, 
Investing and Financing Activities of an enterprise between the dates of two consecutive balance Sheets. 
 
The major limitations of Cash Flow Statement are as follows;  
1. Ignores non –Cash  
    Transactions 
It ignores the non-cash transactions. In other words, it does not take into 
consideration those transactions which do not affect the cash For 
Example, issue of Shares against the purchase of Fixed Assets or Stock-
in-trade, Conversion of debenture into Shares. 
2. Secondary Data  
    Based Statement 
It is a secondary data based statement. It merely rearranges the primary 
data already appearing in other statements viz., Income Statement and 
balance Sheet. 
3. Historical 
Statement 
It is basically historical in nature because it is prepared on the basis of 
Historical Financial Statements. 
4. Ignores Accrual 
Concept 
It ignores the Fundamental assumption of Accrual. 
The various uses of cash Flows Statement are as follows; 
1. Facilitates to ascertain net cash flows: Cash Flow Statement facilitates to ascertain Net Cash Flows from operating, 
Investing and Financing Activities and Net Change in Cash and Cash Equivalents. 
2. Facilitates to evaluate Cash Financial performance: It facilitates to evaluate Cash Financial Performance by providing 
information on net Cash flows from Operating Activities. 
3. Facilitates to evaluate Cash Financial Position: It facilitates to evaluate cash Financial position by providing information 
on Net Cash flows from investing Activities and Financing Activities. 
4. Facilitates Efficient Cash Management: The management can know the situation of shortage or surplus cash and can 
plan for the effective use of surplus cash or can make the necessary arrangement in case of an short age of cash. 
5. Facilitates Comparison: It facilitates the comparative study of the operating performance of different enterprises 
because it eliminates the effects of using different accounting treatments for the same transactions and events. 
Facilitates Capital Budgeting Decisions: It facilitates Capital budgeting Decisions by providing information on net Cash 
Flows from Investing Activities 
 
Operating Activities are the principal revenue-producing activities of the enterprise and other activities that are not 
investing or financing activities. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Goods 
2. Cash received from Trade Debtor 
1. Cash Purchases of Goods. 
2. Cash paid to Trade Creditors. 
 
    
 
3. Cash received from Trading Commissions 
& Royalty 
3. Operating Expenses paid (e.g., Salaries & 
Wages, Administration Exp. Selling Exp.) 
4. Income Tax (related to Operatingactivities 
only) paid. 
In case of Financial Enterprises the following activities are classified as Operating Activities since they relate to the mai n 
revenue producing activity of that enterprise; 
1. Purchase and Sales of Shares & Debentures of other companies for Cash. 
2. Dividend received on Shares of other companies 
3. Interest received on Debentures of their companies. 
4. Loan & Advances granted. 
5. Interest received on loans & Advances granted. 
 
Investing Activities are the acquisition and disposal of long-term Assets  and other investments not included in Cash 
Equivalents. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Fixed Assets. 
2. Cash Sale of Investments (Whether 
Current or Non-Current) 
3. Loans & advances repayment  received 
(Whether Short-term or Long –term) 
4. Income received on investments 
(Whether Current or Non-Current) 
1. Cash Purchases of Fixed Assets. 
2. Cash purchases of investments (Whether 
short-term or long –term) 
3. Loans & advances granted. (Whether 
Short-term or Long-term) 
4. Brokerage paid on Purchase of 
investments (Whether short-term or Long 
-term). 
 
FinancingActivities are activities that result in changes in the size and composition of the owner’s Capital (including 
preference Share Capital in the case of company) and Borrowings (whether short-term or Long-term) of the enterprise. 
Examples- 
Cash Inflows Cash outflows 
1. Issue of Equity Shares for Cash. 
2. Issue of Preference Shares for Cash. 
3. Issue of Debentures for Cash. 
4. Loans taken (whether for short-term or 
Long –term). 
5. Interest received on Calls-in-arrears. 
1. Buy-back of Equity Shares for Cash. 
2. Redemption of preference Shares for 
Cash. 
3. Redemption of Debentures for Cash 
4. Loans repaid (whether short-term or 
Long-term). 
5. Interest on Debentures and loans Paid 
(whether short-term or Long –term). 
6. Final Dividend on Equity Shares paid. 
7. Dividend on preference Shares paid 
8. Interim Dividend on Equity Shares paid. 
9. Brokerage & underwriting commission 
paid on Issue of Shares & Debentures. 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Page 3


 
    
 
 
 
 
Meaning of cash flow statement 
A Cash Flow Statement is a statement that shows the flow of cash and cash equivalents during a period. It traces the flow 
of cash and cash equivalents into and out of the business during an accounting period. 
• Inflows of Cash: All transactions that lead to increase in cash and cash equivalents are classified as inflows of cash. 
• Outflows of Cash: All transactions that lead to a decrease in cash and cash equivalents are classified as outflows of cash. 
 
Examples of Inflows of Cash and Outflows of Cash 
Inflows of Cash Outflows of Cash 
Cash Sales Cash Purchases 
Cash Received against Trade Receivables Cash Paid against Trade Payables 
Cash Received for Interest, Commission, etc. Cash Paid for Expenses. 
Cash Received from Sale of Fixed Assets Cash Purchase of Fixed Assets 
Cash Received against Loans and Advances Loans and Advances given 
Proceeds from Issue of Shares or Debentures Cash paid to Redeem Preference Shares or 
Debentures 
 
The objectives of Cash Flow Statement are as follows; 
1. To ascertain net Cash Flows from Operating, Investing and Financing Activities of an enterprise. 
2. To ascertain the Net Change in Cash & Cash Equivalents indicating the aggregate of net Cash Flows from Operating, 
Investing and Financing Activities of an enterprise between the dates of two consecutive balance Sheets. 
 
The major limitations of Cash Flow Statement are as follows;  
1. Ignores non –Cash  
    Transactions 
It ignores the non-cash transactions. In other words, it does not take into 
consideration those transactions which do not affect the cash For 
Example, issue of Shares against the purchase of Fixed Assets or Stock-
in-trade, Conversion of debenture into Shares. 
2. Secondary Data  
    Based Statement 
It is a secondary data based statement. It merely rearranges the primary 
data already appearing in other statements viz., Income Statement and 
balance Sheet. 
3. Historical 
Statement 
It is basically historical in nature because it is prepared on the basis of 
Historical Financial Statements. 
4. Ignores Accrual 
Concept 
It ignores the Fundamental assumption of Accrual. 
The various uses of cash Flows Statement are as follows; 
1. Facilitates to ascertain net cash flows: Cash Flow Statement facilitates to ascertain Net Cash Flows from operating, 
Investing and Financing Activities and Net Change in Cash and Cash Equivalents. 
2. Facilitates to evaluate Cash Financial performance: It facilitates to evaluate Cash Financial Performance by providing 
information on net Cash flows from Operating Activities. 
3. Facilitates to evaluate Cash Financial Position: It facilitates to evaluate cash Financial position by providing information 
on Net Cash flows from investing Activities and Financing Activities. 
4. Facilitates Efficient Cash Management: The management can know the situation of shortage or surplus cash and can 
plan for the effective use of surplus cash or can make the necessary arrangement in case of an short age of cash. 
5. Facilitates Comparison: It facilitates the comparative study of the operating performance of different enterprises 
because it eliminates the effects of using different accounting treatments for the same transactions and events. 
Facilitates Capital Budgeting Decisions: It facilitates Capital budgeting Decisions by providing information on net Cash 
Flows from Investing Activities 
 
Operating Activities are the principal revenue-producing activities of the enterprise and other activities that are not 
investing or financing activities. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Goods 
2. Cash received from Trade Debtor 
1. Cash Purchases of Goods. 
2. Cash paid to Trade Creditors. 
 
    
 
3. Cash received from Trading Commissions 
& Royalty 
3. Operating Expenses paid (e.g., Salaries & 
Wages, Administration Exp. Selling Exp.) 
4. Income Tax (related to Operatingactivities 
only) paid. 
In case of Financial Enterprises the following activities are classified as Operating Activities since they relate to the mai n 
revenue producing activity of that enterprise; 
1. Purchase and Sales of Shares & Debentures of other companies for Cash. 
2. Dividend received on Shares of other companies 
3. Interest received on Debentures of their companies. 
4. Loan & Advances granted. 
5. Interest received on loans & Advances granted. 
 
Investing Activities are the acquisition and disposal of long-term Assets  and other investments not included in Cash 
Equivalents. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Fixed Assets. 
2. Cash Sale of Investments (Whether 
Current or Non-Current) 
3. Loans & advances repayment  received 
(Whether Short-term or Long –term) 
4. Income received on investments 
(Whether Current or Non-Current) 
1. Cash Purchases of Fixed Assets. 
2. Cash purchases of investments (Whether 
short-term or long –term) 
3. Loans & advances granted. (Whether 
Short-term or Long-term) 
4. Brokerage paid on Purchase of 
investments (Whether short-term or Long 
-term). 
 
FinancingActivities are activities that result in changes in the size and composition of the owner’s Capital (including 
preference Share Capital in the case of company) and Borrowings (whether short-term or Long-term) of the enterprise. 
Examples- 
Cash Inflows Cash outflows 
1. Issue of Equity Shares for Cash. 
2. Issue of Preference Shares for Cash. 
3. Issue of Debentures for Cash. 
4. Loans taken (whether for short-term or 
Long –term). 
5. Interest received on Calls-in-arrears. 
1. Buy-back of Equity Shares for Cash. 
2. Redemption of preference Shares for 
Cash. 
3. Redemption of Debentures for Cash 
4. Loans repaid (whether short-term or 
Long-term). 
5. Interest on Debentures and loans Paid 
(whether short-term or Long –term). 
6. Final Dividend on Equity Shares paid. 
7. Dividend on preference Shares paid 
8. Interim Dividend on Equity Shares paid. 
9. Brokerage & underwriting commission 
paid on Issue of Shares & Debentures. 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
Particulars Rs. 
A. Cash flow from operating activities 
Net profit as per the statement of P & L A/c. (CY-PY) after all appropriations 
Add :   Transfer to reserves* (SSCCO)        all reserves except security premium 
             Proposed dividend (CY) made 
             Interim dividend paid during the year 
             Provision for taxation (CY) made              
Less:    Refund of income tax 
  Net profit before taxation  
 Add: depreciation 
             Loss on sale of fixed assets and investments 
             Goodwill, Patents and Trademarks amortized    
             Interest paid on borrowings(loans) and debentures 
             Preliminary expenses/under writing commissions/ share issue expenses / discount on issue of shares/  
loss on issue of debentures written off   
            Increase in provisions   
less:     Profit on sale of fixed assets and investments  
             Interest ,dividend received and Rental income 
            Decrease in provisions  
Operating profit before working capital changes  
 Add:    CA  
              CL     
Less:   CA  
            CL   
   Cash generated from operations 
Less:  provision for taxation(PY)paid (net of tax refund) 
Net cash flow from(or used ) in operating activities 
 
B. Cash flow from investing activities 
Add:  Proceeds from Sale of Tangible Fixed Assets  
           Proceeds from Sale of intangible Fixed Assets    
           Proceeds from Sale of Non-Current Investments  
           Interest and Dividend received 
           Rent received 
Less:  Purchase of Tangible Fixed Assets   
           Purchase of Intangible Fixed Assets like Goodwill   
           Purchase of Non-Current Investments  
    Net cash flow from(or used ) in investing activities 
 
C. Cash flow from Financing activities 
Add:   Proceeds from issue of Shares and Debentures  
           Proceeds from Long-term Borrowings like debentures, loans and public deposits  
            Security premium increase 
Less:  Final Dividend Paid                                   
            Interim Dividend Paid 
            Interest on Long-term borrowings paid  
            Repayment of Loan   
           Redemption of Debentures 
            Security premium decreases 
           Premium on redemption 
           Discount on issue 
          Misc. expenditure increases 
 Net cash flow from(or used ) in financing activities 
        A+B+C (cash flow statement) net increase or decrease  
        Add cash and cash equivalents at the beginning of the year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    ….. 
………… 
                                                          Cash and cash equivalents at the end of the year  
   
         
Fixed assets  
Fixed assets  
L
.
L 
      
    L.L 
Page 4


 
    
 
 
 
 
Meaning of cash flow statement 
A Cash Flow Statement is a statement that shows the flow of cash and cash equivalents during a period. It traces the flow 
of cash and cash equivalents into and out of the business during an accounting period. 
• Inflows of Cash: All transactions that lead to increase in cash and cash equivalents are classified as inflows of cash. 
• Outflows of Cash: All transactions that lead to a decrease in cash and cash equivalents are classified as outflows of cash. 
 
Examples of Inflows of Cash and Outflows of Cash 
Inflows of Cash Outflows of Cash 
Cash Sales Cash Purchases 
Cash Received against Trade Receivables Cash Paid against Trade Payables 
Cash Received for Interest, Commission, etc. Cash Paid for Expenses. 
Cash Received from Sale of Fixed Assets Cash Purchase of Fixed Assets 
Cash Received against Loans and Advances Loans and Advances given 
Proceeds from Issue of Shares or Debentures Cash paid to Redeem Preference Shares or 
Debentures 
 
The objectives of Cash Flow Statement are as follows; 
1. To ascertain net Cash Flows from Operating, Investing and Financing Activities of an enterprise. 
2. To ascertain the Net Change in Cash & Cash Equivalents indicating the aggregate of net Cash Flows from Operating, 
Investing and Financing Activities of an enterprise between the dates of two consecutive balance Sheets. 
 
The major limitations of Cash Flow Statement are as follows;  
1. Ignores non –Cash  
    Transactions 
It ignores the non-cash transactions. In other words, it does not take into 
consideration those transactions which do not affect the cash For 
Example, issue of Shares against the purchase of Fixed Assets or Stock-
in-trade, Conversion of debenture into Shares. 
2. Secondary Data  
    Based Statement 
It is a secondary data based statement. It merely rearranges the primary 
data already appearing in other statements viz., Income Statement and 
balance Sheet. 
3. Historical 
Statement 
It is basically historical in nature because it is prepared on the basis of 
Historical Financial Statements. 
4. Ignores Accrual 
Concept 
It ignores the Fundamental assumption of Accrual. 
The various uses of cash Flows Statement are as follows; 
1. Facilitates to ascertain net cash flows: Cash Flow Statement facilitates to ascertain Net Cash Flows from operating, 
Investing and Financing Activities and Net Change in Cash and Cash Equivalents. 
2. Facilitates to evaluate Cash Financial performance: It facilitates to evaluate Cash Financial Performance by providing 
information on net Cash flows from Operating Activities. 
3. Facilitates to evaluate Cash Financial Position: It facilitates to evaluate cash Financial position by providing information 
on Net Cash flows from investing Activities and Financing Activities. 
4. Facilitates Efficient Cash Management: The management can know the situation of shortage or surplus cash and can 
plan for the effective use of surplus cash or can make the necessary arrangement in case of an short age of cash. 
5. Facilitates Comparison: It facilitates the comparative study of the operating performance of different enterprises 
because it eliminates the effects of using different accounting treatments for the same transactions and events. 
Facilitates Capital Budgeting Decisions: It facilitates Capital budgeting Decisions by providing information on net Cash 
Flows from Investing Activities 
 
Operating Activities are the principal revenue-producing activities of the enterprise and other activities that are not 
investing or financing activities. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Goods 
2. Cash received from Trade Debtor 
1. Cash Purchases of Goods. 
2. Cash paid to Trade Creditors. 
 
    
 
3. Cash received from Trading Commissions 
& Royalty 
3. Operating Expenses paid (e.g., Salaries & 
Wages, Administration Exp. Selling Exp.) 
4. Income Tax (related to Operatingactivities 
only) paid. 
In case of Financial Enterprises the following activities are classified as Operating Activities since they relate to the mai n 
revenue producing activity of that enterprise; 
1. Purchase and Sales of Shares & Debentures of other companies for Cash. 
2. Dividend received on Shares of other companies 
3. Interest received on Debentures of their companies. 
4. Loan & Advances granted. 
5. Interest received on loans & Advances granted. 
 
Investing Activities are the acquisition and disposal of long-term Assets  and other investments not included in Cash 
Equivalents. 
Examples – 
Cash Inflows Cash outflows 
1. Cash Sales of Fixed Assets. 
2. Cash Sale of Investments (Whether 
Current or Non-Current) 
3. Loans & advances repayment  received 
(Whether Short-term or Long –term) 
4. Income received on investments 
(Whether Current or Non-Current) 
1. Cash Purchases of Fixed Assets. 
2. Cash purchases of investments (Whether 
short-term or long –term) 
3. Loans & advances granted. (Whether 
Short-term or Long-term) 
4. Brokerage paid on Purchase of 
investments (Whether short-term or Long 
-term). 
 
FinancingActivities are activities that result in changes in the size and composition of the owner’s Capital (including 
preference Share Capital in the case of company) and Borrowings (whether short-term or Long-term) of the enterprise. 
Examples- 
Cash Inflows Cash outflows 
1. Issue of Equity Shares for Cash. 
2. Issue of Preference Shares for Cash. 
3. Issue of Debentures for Cash. 
4. Loans taken (whether for short-term or 
Long –term). 
5. Interest received on Calls-in-arrears. 
1. Buy-back of Equity Shares for Cash. 
2. Redemption of preference Shares for 
Cash. 
3. Redemption of Debentures for Cash 
4. Loans repaid (whether short-term or 
Long-term). 
5. Interest on Debentures and loans Paid 
(whether short-term or Long –term). 
6. Final Dividend on Equity Shares paid. 
7. Dividend on preference Shares paid 
8. Interim Dividend on Equity Shares paid. 
9. Brokerage & underwriting commission 
paid on Issue of Shares & Debentures. 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
Particulars Rs. 
A. Cash flow from operating activities 
Net profit as per the statement of P & L A/c. (CY-PY) after all appropriations 
Add :   Transfer to reserves* (SSCCO)        all reserves except security premium 
             Proposed dividend (CY) made 
             Interim dividend paid during the year 
             Provision for taxation (CY) made              
Less:    Refund of income tax 
  Net profit before taxation  
 Add: depreciation 
             Loss on sale of fixed assets and investments 
             Goodwill, Patents and Trademarks amortized    
             Interest paid on borrowings(loans) and debentures 
             Preliminary expenses/under writing commissions/ share issue expenses / discount on issue of shares/  
loss on issue of debentures written off   
            Increase in provisions   
less:     Profit on sale of fixed assets and investments  
             Interest ,dividend received and Rental income 
            Decrease in provisions  
Operating profit before working capital changes  
 Add:    CA  
              CL     
Less:   CA  
            CL   
   Cash generated from operations 
Less:  provision for taxation(PY)paid (net of tax refund) 
Net cash flow from(or used ) in operating activities 
 
B. Cash flow from investing activities 
Add:  Proceeds from Sale of Tangible Fixed Assets  
           Proceeds from Sale of intangible Fixed Assets    
           Proceeds from Sale of Non-Current Investments  
           Interest and Dividend received 
           Rent received 
Less:  Purchase of Tangible Fixed Assets   
           Purchase of Intangible Fixed Assets like Goodwill   
           Purchase of Non-Current Investments  
    Net cash flow from(or used ) in investing activities 
 
C. Cash flow from Financing activities 
Add:   Proceeds from issue of Shares and Debentures  
           Proceeds from Long-term Borrowings like debentures, loans and public deposits  
            Security premium increase 
Less:  Final Dividend Paid                                   
            Interim Dividend Paid 
            Interest on Long-term borrowings paid  
            Repayment of Loan   
           Redemption of Debentures 
            Security premium decreases 
           Premium on redemption 
           Discount on issue 
          Misc. expenditure increases 
 Net cash flow from(or used ) in financing activities 
        A+B+C (cash flow statement) net increase or decrease  
        Add cash and cash equivalents at the beginning of the year 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    ….. 
………… 
                                                          Cash and cash equivalents at the end of the year  
   
         
Fixed assets  
Fixed assets  
L
.
L 
      
    L.L 
 
    
 
Reserve (SSCCO) operating 
 Surplus 
Sinking fund(D.R.R.) 
Capital reserve  
Capital redemption reserve 
Other reserves 
General reserves 
 
 
 
Fixed assets 
(investing activity) 
Long term liabilities 
(financing activity) 
 Land  
Buildings 
Plant & machinery 
Gross block 
Long term investments 
Furniture & fixtures 
Vehicles 
Debentures 
Loans(all types except Short 
term loans) 
Shares 
Borrowings 
Public deposits 
Bank overdraft 
 
Some Importantpoints 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
Current assets(operating) Current liabilities (operating) 
Inventory/ stock 
Debtors/ book debts 
Trade receivables 
Bills receivables 
Accrued incomes 
Prepaid expenses 
Unexpired amounts 
Other C.A. 
Creditors 
Provisions for doubtful debts 
Bills payables 
Trade payables 
Unpaid dividends 
Outstanding expenses 
 Short term loans 
Matured debentures 
Other C.L. if any 
Cash and cash Equivalents 
Cash 
Cash at bank 
Short term investment 
Provision for taxation 
 
 
2012(PY)         2013(CY) 
 
PAID                 MADE 
 
OP – (A)           OP + (A) 
Security Premium 
          
increase        decrease 
 
fin+(c)           fin - (c) 
 
goodwill/ patents/ tm 
          
increase        decrease 
 
investing-(b)           op + (a) 
      Premium on redemption 
 
 
  op+ A            fin – C 
    Refund of income tax 
 
Tax made-             tax paid + 
 Proposed Dividend 
 
 
2012(PY)         2013(CY) 
 
PAID                 MADE 
 
fin – (C)           OP + (A) 
 
misc expenditure 
          
increase        decrease 
 
fin-(c)           op + (A) 
interest paid/ interim dividend 
 
 
  op+ A       fin – C 
interest received/ Dividend received 
       
 
op- A             INV +B 
         Drawings 
   
       
op+ A               fin – C