- Question 2 Below Are The Recent Balance Sheet And Income Statement Of Ugs Trading Balance Sheet As At 31 12 Yyyy Yr 202 1 (199.75 KiB) Viewed 35 times
- Question 2 Below Are The Recent Balance Sheet And Income Statement Of Ugs Trading Balance Sheet As At 31 12 Yyyy Yr 202 2 (43.33 KiB) Viewed 35 times
(a) Examine the Cash Flow from Assets (CFFA) for the Year 2021?
(10 marks)
(b) Examine the Cash Flow to Creditors (CFTC) for the Year 2021?
(5 marks)
(c) Examine the Cash Flow to Shareholders (CFTS) for the Year
2021? (5 marks)
(d) Appraise three (3) key points that
you could draw from these three sets of cash flows? (15 marks)
(e) Discuss how the firm was financed in Year 2021 by commenting
on the level of gearing in Year 2021 (10 marks)
(f) Henceforth, infer the likely level of the Return of Equity
in the previous Year 2020. Justify your response. (5 marks)
Relevant formulas for this topic/question:
Pic 1
- Question 2 Below Are The Recent Balance Sheet And Income Statement Of Ugs Trading Balance Sheet As At 31 12 Yyyy Yr 202 3 (116.33 KiB) Viewed 35 times
- Question 2 Below Are The Recent Balance Sheet And Income Statement Of Ugs Trading Balance Sheet As At 31 12 Yyyy Yr 202 4 (68.09 KiB) Viewed 35 times
Income Statement for the Year 2021 (figures in thousands) Sales Cost of Goods Sold Gross Profit General & Selling Expenses Depreciation Gain on Sale of Fixed Asset Earnings before Interest & Tax Interest Earnings before Tax Tax Net Income 19950 (10698) 9252 (7100) (240) 8 1920 (50) 1870 (920) 950
Cash flow from assets = Cash flow to creditors + Cash flow to shareholders Cash flow to creditors = Interest paid – Net new borrowing Cash flow to shareholders = Dividends paid – Net new equity raised Current ratio Current assets Current liabilities Total liabilities Debt-equity ratio Total equity EBIT Times interest earned (TIE) = Interest expense = Sales Total asset turnover = Total assets Profit margin Net income Sales Return on assets (ROA) Net income Total assets Price-earnings (PE) = Price per share Earnings per share ROE = Profit margin x Total asset turnover x Equity multiplier
Cash flow from assets (CFFA) Operating cash flow – Net capital spending – Changes in net working capital = Operating cash flow (OCF) Earnings before interest and taxes (EBIT) + Depreciation – Taxes - OCF = (Sales – Costs)(1 – Tax rate) + (Depreciation Tax rate) = Net capital spending (NCS) = Ending net fixed assets – Beginning net fixed assets + Depreciation = -