![Cash flow statement
Cash Flow Statement is a statement that shows the cash flows, i.e., inflow and outflow of Cash and
Cash Equivalents during the accounting period from operating, investing and financing activities.
It is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that
come in and go out of a company. The CFS measures how well a company manages its cash
position, meaning how well the company generates cash to pay its debt obligations and fund
its operating expenses. As one of the three main financial statements, the CFS complements the
balance sheet and the income statement.
Cash Flow Statement is prepared according to the Accounting Standard-3 (Revised)[AS-3
(Revised)].
Cash flow statement can be prepared either by:-
1) Direct method
2) Indirect method
Cash flow statement by Indirect method can be prepared from Financial statements, i.e. Balance Sheet
and Statement of Profit and Loss.
The indirect cash flow method allows for a reconciliation between two other financial statements: the
income statement and balance sheet.
The main components of a cash flow statement are:-
1) Cash flow from Operating activities
2) Cash flow from Investing activities
3) Cash flow from Financing activities](https://image.slidesharecdn.com/project-240111121835-a972bcdc/85/project-pdf-17-320.jpg)
project.pdf
- 1. ACCOUNTING RATIOS ACCOUNTANY PROJECT DHRUV BANSAL XII-D BAL BHAVAN PUBLIC SCHOOL
- 2. CERTIFICATE MARKET ANALYSIS TECHNICAL ANALYSIS FINANCIAL ANALYSIS ECONOMIC ANALYSIS ECOLOGICAL ANALYSIS Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. This is to certify that Dhruv Bansal of class 12th Commerce of Bal Bhavan Public School, Mayur Vihar PH-II, Delhi-110091 has completed his project under my supervision and guidance. He has taken proper care and utmost sincerity in completion of this project. I certify that this project is up to my expectation and as per guidelines issued by CBSE. _________________ (Signature)
- 3. ACKNOWLEDGMENT Management Objectives Customer Objectives Project Objectives Implementation Plan Schedules Tasks Resources I am highly indebted to the Teacher-in-charge Ms. Divya Kaushik for his guidance and constant supervision as well as for providing necessary information regarding the project and also for support in completing the project. I would like to express my gratitude towards my parents and Principal Sir Mr. Vividh Gupta. Name of the student: - Dhruv Bansal Roll no. : - _____________ ______________________ (Signature)
- 4. WALMART Type : Private Founded: 1962; 59 years ago Headquarters : Rogers, Arkansas Area served : Worldwide Revenue : US $559.2 BILLION Total Employees : 23,00,000 Walmart Inc is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores from the United States, headquartered in Bentonville, Arkansas and was founded by Sam Walton. It is a publicly traded family-owned business, as the company is controlled by the Walton family. Sam Walton's heirs own over 50 percent of Walmart through both their holding company Walton Enterprises and their individual holdings.
- 9. Accounting Ratios The Accounting Ratio is used to describe significant relationships which exist between figures shown in a balance sheet, in a statement of Profit and loss, in a budgetary control system or in any part of accounting organisations. Types of Accounting ratios 1) Liquidity Ratios: These ratios show the ability of the enterprise to meet its short term financial obligations. Types: 1) Current Ratio, 2) Quick Ratio 2) Solvency Ratios: These ratios are calculated to assess long term financial position of the company or long term financial obligations. Types: 1) Debt to Equity Ratio, 2) Total assets to debt Ratio, 3) Proprietary Ratio, 4) Interest Coverage Ratio. 3) Activity Ratios or Turnover Ratios: These ratios show how efficiently a company is using its resources. Types: 1) Inventory Turnover Ratio, 2) Trade Receivable Turnover Ratio, 3) Trade Payable Turnover Ratio, 4) Working Capital Turnover Ratio. 4) Profitability Ratios: These ratios show the profitability of the firm. Types: 1) Gross Profit Ratio, 2) Operating Ratio, 3) Operating Profit Ratio, 4) Net Profit Ratio, 5) Return on Investment.
- 10. Ratio Analysis PROJECT Total Assets to Debt Ratio Working Capital turnover Ratio Gross Profit Ratio Current Ratio Quick Ratio Debt to Equity Ratio
- 11. Current Ratio Current Ratio establishes the relationship between current assets and current liabilities. It is an indicator whether the enterprise will be able to meet its short term financial obligations as and when they become due for payment. Ideal Ratio = 2:1
- 12. Quick Ratio It is a liquidity ratio which measures the ability of the enterprise to meet its short term financial obligations. It establishes relationship between Quick Assets and Current Liabilities. Ideal Ratio = 1:1 .
- 13. Debt to Equity Ratio Debt to Equity Ratio shows relationship between long-term external equities (i.e., external debts) and internal equities (i.e., Shareholders' Funds) of the enterprise. It is computed to assess long-term financial soundness of the enterprise. Ideal Ratio = 2:1 .
- 14. Total Assets to Debt Ratio Total Assets to Debt Ratio shows the relationship between total assets and long term debts of the enterprise. Ideal Ratio = 1:1 .
- 15. Working Cap. Turnover Ratio Working Capital Turnover Ratio shows the relationship between working capital and Revenue from Operations. It shows the number of times a unit of Rupee invested in working capital produces sales. Represented in no. of times.
- 16. Gross Profit Ratio Gross Profit Ratio establishes the relationship of Gross Profit and Revenue from Operations, i.e., Net Sales of an enterprise. Expressed in Percentage.
- 17. Cash flow statement Cash Flow Statement is a statement that shows the cash flows, i.e., inflow and outflow of Cash and Cash Equivalents during the accounting period from operating, investing and financing activities. It is a financial statement that summarizes the movement of cash and cash equivalents (CCE) that come in and go out of a company. The CFS measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. As one of the three main financial statements, the CFS complements the balance sheet and the income statement. Cash Flow Statement is prepared according to the Accounting Standard-3 (Revised)[AS-3 (Revised)]. Cash flow statement can be prepared either by:- 1) Direct method 2) Indirect method Cash flow statement by Indirect method can be prepared from Financial statements, i.e. Balance Sheet and Statement of Profit and Loss. The indirect cash flow method allows for a reconciliation between two other financial statements: the income statement and balance sheet. The main components of a cash flow statement are:- 1) Cash flow from Operating activities 2) Cash flow from Investing activities 3) Cash flow from Financing activities
- 18. Cash flow statement Cash Flow from Operating Activities • Cash Flow from Operating Activities being the principal revenue producing activity of enterprise, generally results from the business transactions and events that determine net profit or loss. • Operating Activities are the principal revenue producing activities of the enterprise and other activities that are not Investing or Financing Activities. • Principal revenue producing activities mean business activities being carried by the enterprise to earn profit. For example: For a computer manufacturing company, manufacturing and selling of computers is its principal revenue producing activity. Cash Flow from Investing Activities • Investing Activities are the acquisition and disposal of the Long-term Assets and Other Investments, not included in cash equivalents. • These activities include transactions involving purchase and sale of the Long-term Assets, which are not held for resale such as plant and machinery, land and building, investments, etc. • Investments include investments that are not included in Cash and Cash Equivalents such as current investments other than marketable securities. Investments include investment made in long-term investments and other investments by the enterprise with a purpose to generate income and thus, cash flow.
- 19. Cash flow statement Cash Flow from Financing Activities • Financing Activities are the activities which result in change in size and composition of owner's capital (including Preference Share Capital in the case of a company) and borrowings of the enterprise from other sources. • Thus, increase in share capital (both equity and preference), redemption of preference shares, issue of debentures, increase in borrowings (short-term and long-term repayment of borrowings (short-term and long-term) and redemption of debentures, et are Financing Activity. Objectives of Cash flow Statement • To determine the sources (receipts) of Cash and Cash Equivalents under Operating, Investing and Financing Activities of the enterprise. • To determine applications (payments) of Cash and Cash Equivalents under Operating, Investing and Financing Activities of the enterprise. • To determine net change in Cash and Cash Equivalents. It is the difference between sources (receipts) and applications (payments) under Operating, Investing and Financing Activities between the dates of two Balance Sheets.
- 20. i Cash flow from Operating Activities
- 21. Cash flow from Financing Activities Cash flow from Investing Activities
- 22. Conclusion The overall performance of the company is better but not satisfied with the short term obligations of the company as current ratio is less than its ideal Ratio. The profitability from the operations of the company has increased from previous year which is a growth indicator. The total assets to debt ratio has also increased which shows the company strength. The total cash flow position of the company is better. The company has negative cash flow from Investing activities because they are purchasing a lot of assets and it also has negative cash flow from financing activities which shows that company is repaying its debt which ultimately shows its creditworthiness.
- 23. Bibliography • Walmart Inc (WMT) Annual Balance Sheets as of Jan 31 2021 – CSIMarket • Walmart Inc (WMT) Annual Income Statement as of Jan 31 2021 Financial Results – CSIMarket • Walmart – Wikipedia • Reference From TS Grewal (Analysis of Financial Statements)
- 24. Thank You