Part B

Download the annual financial reports of BHP Ltd, Santos Ltd, and Funtastic Ltd for the
year 2019, 2018 and 2017. Examine the consolidated Cash Flow Statements for each
companies across three years. Answer the following questions about each of the three cash-
flow statements.

1. For each company [except mentioned otherwise as in c), g) and i) below], across three
years on the Statement of Cash Flows discuss:
c) Compare and contrast the cash flow from operations with the net profit after tax
in income statement. Explain in detail the major reasons for the difference between
these two figures. (Answer this question using only the Cash flow statement for BHP
Limited).
Answer:
Profit after taxation from Continuing and Discontinued operations
Year 2019:
Profit after tax 9,185 Cash flow from Operation 17,871 Difference
8,686
Year 2018:
Profit after tax 4,823 Cash flow from Operation 18,461 Difference
13,638
Year 2017:
Profit after tax 6,222 Cash flow from Operation 16,804 Difference
10,582
The reason for the differences in Profit after tax income statement and cash flow from
operation is:
1. Cash flow from operation presents the cash generated from operation ignoring non
cash and non-operational expenses where net profit after tax is result of all revenue
less expenses, either cash/ nor-cash or operational/non-operational,
a) Was the firm able to generate enough cash from operations to pay for all of its
capital expenditures?
Answer:
In case of BHP Ltd, the firm was able to generate enough cash flow from operation to pay of
its capital expenditures, capital expenditure for firms throughout the years 2017-2019 12,673
million, 11,228 million, 12,762 million respectively, which is covered by cash flow from
operation.
Except for BHP both the other firm Santos and Funtastic Ltd were unable to generate enough
cash from operation to pay for its all of its capital expenditure.
Santos Ltd: 2019 2018 2017
 Capital Expenditure (2,666.00) (2,755.00) (2,990.00)
Cash flow from Operation 2,046.00 1,578.00 1,248.00

In case if Funtastic Ltd, the firm has been generating negative cash flow from operation,
where there is no reason that firm could pay any of its capital expenditure from operation
cash.
e) Did the cash flow from operations cover the dividend payment made by the firm
(if any)?
Answer:
In case of BHP Ltd, firm has generated enough cash from operation to pay its dividend, in
2017 and 2018, where the firm fell short in 2019, which firm has recovered such short fall
from sell of Onshore US share.
Funtastic Ltd, has not paid any of dividend as well firm had negative cash flow from
operation.
In case of Santosh Ltd, firm has not paid any dividend on 2017, where in 2018 and 2019, firm
was unable to cover its dividend payment from Cash generated from operation as, firm has
acquired huge borrowings in same years even to pay for capital expenditure and further for
dividend too.