Cash flow from operating activity

Net income
Adjustments related to Non-cash/Non-operating items
Add Interest on debentures
Change in operating assets and liabilities
Add Increase in Trade payables
Less Decrease in Other Current Liabilities
Less Increase in Current Investment
Less Increase in Inventories
Less Increase in Trade Receivables
Cash flow generated from Operating activity
Cash flow from Investing Activity
Add Sale of Intangible assets
Less Purchase of fixed assets
Less Loans and advances given
Cash flow generated from Investing activity
Cash flow from Financing Activity
Add Issue of share capital
Less Repayment of debentures
Less Interest on debentures
Net cash flow generated
Add Opening cash and cash equivalent
Closing cash and cash equivalent
 20,000.00

12,000.00 32,000.00

100,000.00
5,000.00
2,000.00
20,000.00
20,000.00 53,000.00
85,000.00

8,000.00
80,000.00
30,000.00
(102,000.00)

50,000.00
20,000.00
12,000.00 18,000.00
1,000.00
12,000.00
13,000.00
Q2 Particulars Notes 2021
Revenue From Operations 1,000,000
I Other Income 11,000
Total 1,011,000
Expenses
Purchases of Stock-in-Trade 700,000
II Change in Inventories of Stock-in-Trade 48,000
Employees Benefit Expenses 98,000
Other Expenses 90,000
Total 936,000
III Profit (I-II) 75,000

Common Size Statement

A typical size income statement is one in which each line item is stated as a proportion o
easier to compare a company's performance over time and against that of a rival.

It is a statement in which the revenue from operations figure is assumed to be 100 and al
operations figure. All percentages will be determined using Revenue from Operations.

Comparative Statement
A comparative statement is a document that compares one financial statement to previou
most recent statistics in side-by-side columns, allowing investors to spot patterns, watch
industry.
 Common Size Statement (%) Comparative Statement
2020 2021 2020 2021
1,000,000 98.91 99.01 0.00
10,000 1.09 0.99 10.00
1,010,000 100.00 100.00 0.10

650,000 69.24 64.36 7.69

50,000 4.75 4.95 -4.00
80,000 9.69 7.92 22.50
117,500 8.90 11.63 -23.40
897,500 92.58 88.86 4.29
112,500 7.42 11.14 -33.33

em is stated as a proportion of revenue or sales. Common size financial statements make it

against that of a rival.

e is assumed to be 100 and all other values are stated as a percentage of the revenue from
Revenue from Operations.

financial statement to previous period statements. Previous financials are shown alongside the
estors to spot patterns, watch a company's development, and compare it to competitors in the
 Cash flow from Operating Activity
Net profit after tax
Add Provion for taxation 306,000.00
Less Refund of Income Tax (6,000.00)
Non-Cash/Non-Operating Items
Add Proposed dividend
Add Depreciation
Add Loss on sale of investments
Less Compensation for earthquake disaster
Less Profit on sale of Machinery
Less Dividend received on investments
Change in operating assets and liabilities
Add Decrease in Current assets
Add Increase in Current liabilities
Less Increase in current assets
Less Decrease in Current Liabilities
Less Income Tax paid
Cash flow from operations after tax
Add Compensation for earthquake disaster
Add Refund of Income Tax
Net Cash Flow from Operating activities
1,406,000.00
1,706,000.00
300,000.00

242,000.00
280,000.00
60,000.00
(150,000.00)
(35,000.00)
(30,000.00) 367,000.00

20,000.00
302,000.00
(600,000.00)
(128,000.00)
(236,000.00) (642,000.00)
1,431,000.00
150,000.00
6,000.00
1,587,000.00
The Current Ratio is 2:1
Lets assume Current Asset will be 2,00,000 and current liabilities will be 1,00,000.

1 Payment of Current

Assume that Rs.20,000 is paid in cash to creditors. This reduces the current asset to Rs.1
new ratio. As a result, the current ratio

2 Purchased goods on
Assume you buy products for Rs.30,000 on credit. This raises current assets to Rs.2,30,0
ratio will be lowered.

3 Sale of a computer (Book

Current assets will grow to Rs.2,03,000 as a result of the sale of a computer, but cu

4 Sale of a merchandise (go

It would reduce inventory by Rs.10,000 while increasing cash by Rs.11,000. As a result
result, the new ra

5 Paym
Assume a dividend of Rs.10,000 is paid. It would cut current assets to Rs.1.9 million a
bett
ities will be 1,00,000.

Payment of Current liability

ces the current asset to Rs.180,000 and the current liability to Rs.80,000. 2.25:1 will be the
As a result, the current ratio will improve.

Purchased goods on credit

s current assets to Rs.2,30,000 and current liabilities to Rs.1,30,000. As a result, the current
ratio will be lowered.

Sale of a computer (Book value: Rs 4,000) for rs. 3,000 only

he sale of a computer, but current liabilities will remain unchanged. The present ratio will improve as a result.

Sale of a merchandise (goods) costing Rs.10,000 for Rs. 11,000

sh by Rs.11,000. As a result, the current asset is increased by Rs.1,000 but the current liabilities remain same. A
result, the new ratio will improve.

Payment of dividend
nt assets to Rs.1.9 million and current liabilities to Rs.10,000. The current ratio is 2.11:1. The new current ratio
better.
io will improve as a result.

ent liabilities remain same. As a

.11:1. The new current ratio is