Page 103 - Corporate Finance PDF Final new link

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BRILLIANT’S Cash Flow Statement 103

V. Cash and cash equivalents at the beginning of the period
Cash-in-hand -----
Cash-at-bank -----
Short-term deposits -----
Marketable Securities -----
Less: Bank Overdraft/Cash Credit (-----) -----
VI. Cash and cash equivalents at the end of the period
(IV + V)
Cash-in-hand -----
Cash-at-bank -----
Short-term deposits -----
Marketable Securities -----
Less: Bank Overdraft/Cash Credit (-----) -----
Note : If we compare the proforma of cash flow statement under direct and indirect method,
it is clear that there is difference of presentation only while calculating cash flow from
operating activities. The presentation in calculating cash flow from investing and financing
activities is quite similar.
ZmoQ>: `{X h_ S>m`aoŠQ> _oWS> VWm BZS>m`aoŠQ> _oWS> Ho$ AZwgma H¡$e âbmo ñQ>oQ>_|Q> àmo\$m°_m© H$s VwbZm H$aVo h¢ Vmo
nmVo h¢ {H$ Am°naoqQ>J EpŠQ>{dQ>r go H¡$e âbmo H$s JUZm H$aVo g_` Ho$db CZHo$ àH$Q> H$aZo Ho$ VarH$m| _| A§Va
hmoVm h¡Ÿ& BÝdopñQ>¨J Ed§ \$m`ZopÝg¨J EpŠQ>{dQ>rO go àmßV H¡$e âbmo H$s JUZm H$s àñVw{V g_mZ hmoVr h¡Ÿ&

Explanation of Some Important Ad- Hw$N> _hËdnyU© ES>OñQ>_|Q> H$s ì`m»`m
justments
1. Cash Collected from Customers: The 1. J«mhH$m| go àmßV H¡$e: BÝH$_ ñQ>oQ>_|Q> _| Xem©B© JB©
relationship between the amount of cash ZoQ> goëg Ed§ J«mhH$m| go àmßV H¡$e Ho$ ~rM gå~ÝY Bg ~mV
collected from customers and the net sales na {Z^©a H$aVm h¡ {H$ S>oãQ>g© Ho$ eof _| df© Ho$ Xm¡amZ Š`m
reported in the income statement depends on n[adV©Z hþAmŸ& `{X àmapå^H$ eof H$s VwcZm _| S>oãQ>g© H$m
the change in the debtors during the period. If
ApÝV_ eof ~‹T>m h¡ Vmo Bggo kmV hmoVm h¡ {H$ H¡$e H$s VwcZm
the debtors have increased during the period,
it shows that credit sales are being made faster _| CYma {dH«$` A{YH$ hþAm h¡Ÿ& BgHo$ {dnarV `{X S>oãQ>g©
than the cash collected from the customer and Ho$ àmapå^H$ eof H$s VwcZm _| CZH$m ApÝV_ eof H$_ h¡ Vmo
vice-versa. The relationship between net sales BgH$m AW© h¡ {H$ CYma {dH«$` H$s VwcZm _| S>oãQ>g© go àmßV
and cash collected from customers may be H¡$e A{YH$ h¡Ÿ& ewÕ {dH«$` Ed§ S>oãQ>g© go àmßV H¡$e _|
stated as follows: gå~ÝY H$mo Bg àH$ma ì`ŠV {H$`m Om gH$Vm h¡:
Cash Received from Customers = Opening Debtors + Credit Sales during the year–
Closing Debtors
OR
Net Credit Sales + Decrease in the amount of debtors or
(–) Increase in the amount of debtors