derived cash flow

Download Derived Cash Flow

Post on 17-Dec-2014

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Unit 3: Derived Cash Flow. I have uploaded the full question and an excel soluton to the tutor group forum.

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  • 1. Unit 3
    Derived Cash Flow Statements
  • 2. Derived Cash Flow Statement
    Typical accounting systems work on an accruals rather than a cash basis
    For example, revenue is logged when the work is done (products delivered etc) NOT when the cash is received
  • 3. Derived Cash Flow Statement
    Typical accounting systems work on an accruals rather than a cash basis
    For example, revenue is logged when the work is done (products delivered etc) NOT when the cash is received
    So accounting systems do not cope well with producing cash flow statements
    A derived cash flow statement is one arrived at using the companys profit and loss account and its opening and closing balance sheets.
  • 4. Derived Cash Flow Statement
    StartEnd of year
    Fixed assets1,000 1,500
    Debtors (receivables) 500 425
    Stocks (inventories) 300 325
    Cash 25 75
    Other current assets 100 125
    Creditors (payables)