REVISION QUESTIONS: CASH FLOW STATEMENT; ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENTS

Activity / Cash Flow Statement / Calculation of financial indicators / Analysis and interpretation / Other /
One / §  Purpose of CFS
§  Complete CFS
  • Taxation paid
  • Dividends paid
  • Investing Activities
  • Financing Activities
  • Change in C & CE
§  Interpretation of decisions reflected in CFS / §  Acid test ratio
§  Earnings per share
§  Return on shareholders’ equity
§  Debt equity ratio / §  Financing of expansion
§  Dividend policy
§  Alternative investments / Fixed Asset Note: Calculate missing figures
Two / §  Note for Cash Generated from Operations
§  Complete CFS
  • Operating Activities
  • Investing Activities
§  Interpretation of major decisions reflected in CFS / §  Current ratio
§  Debt equity ratio
§  Net asset value per share / §  Interpretation of price at which shares were issued
§  Analysing loan paid back / Audit report
§  Type of report
§  Consequences of audit report on CEO for company
Three
(2 companies) / §  Calculate figures in CFS:
  • Repayment of loans
  • Proceeds from issue of shares
  • Fixed assets purchased
/ §  Acid test ratio
§  Earnings per share
§  Net asset value per share
§  Return on average shareholders’ equity / §  Working capital and liquidity
§  Use of loans
§  Return, earnings and dividends
§  Market value of shares / §  Concepts relating to analysis and interpretation of FS
§  Interpretation of Audit report
Four / §  Calculate figures in CFS:
  • Taxation paid
  • Dividends paid
  • Proceeds from issue of shares
  • Repurchase of shares
  • Loans
  • Net change in C & CE
  • C & CE at beginning of year
§  Interpret major decision reflected in CFS / §  % Net profit after tax on sales
§  Debt equity ratio
§  Return on average shareholders’ equity / §  Operating efficiency
§  Return, earnings and dividends
§  Issue price of shares
§  Repayment of loan
§  / §  Interpretation annual report
Five / §  Complete CFS
  • Taxation paid
  • Dividends paid
  • Investing Activities
  • Financing Activities
  • Change in C & CE
§  Interpretation of decisions reflected in CFS / §  Net asset value
§  Debt equity ratio / §  Liquidity
§  Loan
§  Effect of repurchase of shares on control of company / Fixed Asset Note: Calculate missing figures