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Question of a Cash Flow Statement of Maharaja Limited

IPCC 121 views 2 replies

Nilabja Saha

5 Points Joined August 2022

Kindly help to solve the sum , FIND OUT THE CASH FLOW STATEMENT (OPERATING , INVESTING , FINANCING)

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

9000 Points Joined December 2011

Preparing Cash Flow Statements A cash flow statement is a financial statement that shows the inflows and outflows of cash and cash equivalents over a specific period.

Here's a step-by-step guide to prepare a cash flow statement: Steps to Prepare a Cash Flow Statement

1. *Determine the reporting period*: Choose the specific period for which you want to prepare the cash flow statement, such as a month, quarter, or year.

2. *Classify cash flows*: Categorize cash inflows and outflows into three main sections: -

*Operating activities*: Cash flows from core business operations, such as sales, purchases, salaries, and rent. -

*Investing activities*: Cash flows from investing in assets, such as property, plant, and equipment, or investments in other companies. -

*Financing activities*: Cash flows from financing, such as borrowing, repaying loans, issuing shares, or paying dividends.

3. *Calculate cash inflows and outflows*: Identify and calculate the cash inflows and outflows for each section.

4. *Calculate net cash flow*: Calculate the net cash flow for each section by subtracting the total cash outflows from the total cash inflows.

5. *Calculate the net change in cash*: Calculate the net change in cash by adding the net cash flows from each section.

6. *Reconcile with cash balance*: Reconcile the net change in cash with the beginning and ending cash balances.

Format of a Cash Flow Statement A typical cash flow statement format is as follows: -

*Cash flows from operating activities*: - Cash received from customers - Cash paid to suppliers and employees - Net cash from operating activities -

*Cash flows from investing activities*: - Purchase of property, plant, and equipment - Sale of investments - Net cash from investing activities - *Cash flows from financing activities*: - Proceeds from borrowings - Repayment of loans - Net cash from financing activities - *Net change in cash*: Net increase or decrease in cash and cash equivalents -

*Beginning cash balance*: Cash and cash equivalents at the beginning of the period - *Ending cash balance*: Cash and cash equivalents at the end of the period Tips and

Considerations - *Use the indirect method*: The indirect method is commonly used to prepare cash flow statements, which starts with net income and adjusts for non-cash items. -

*Be accurate and detailed*: Ensure that all cash inflows and outflows are accurately recorded and classified. -

*Analyze and interpret*: Analyze the cash flow statement to identify trends, strengths, and weaknesses, and make informed decisions. By following these steps and tips, you can prepare a comprehensive and accurate cash flow statement that provides valuable insights into your company's financial health.

xiciva aravites

miami

24 Points Joined August 2025

For me the sum method is the easiest to apply!

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