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Cash Flow

By lc61800

How to prepare a simple cash-flow statement. For use in CIMA Paper P3

Added: March 02, 2011 20:38:13

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Cash Flow

Cash Flow
1 Principle
1.1 Start w/ IS
1.2 Look B/S
1.3 Add/Sub non-cash
2 Step1: PBIT
2.1 add/remove non-cash items
2.2 7 items
2.2.1 Depreciation
2.2.2 Amortisation
2.2.3 Impairment
2.2.4 P/L disposal NCA
2.2.5 (take-off) / add-back (I) / D in Inventory
2.2.6 (take-off) / add-back (I) / D in Receivables
2.2.7 add-back/ (take-off) I / (D) in Payables
3 Step2: After PBIT
3.1 Combine B/S & I/S
3.2 OB + IS - CB = Cash
4 Step 3: Items in B/S
4.1 Financing activities
4.1.1 Loans
4.1.2 Shares
4.1.3 OB - CB = Cash
4.2 Bank
4.2.1 Difference = bottom section
4.2.2 Validation figure
4.3 PP&E
4.3.1 Work-out balancing figure
4.3.1.1 Opening balance
4.3.1.2 (-) Depreciation
4.3.1.3 (-) Disposal NBV
4.3.1.4 (+) Additions
4.3.1.5 (-) Impairement
4.3.1.6 (+) Revaluation
4.3.1.7 (=) Closing balance
4.3.2 Remember: NBV of disposal = Proceeds (-) G/L DNCA
4.3.3 Report genuine cash
4.3.3.1 Disposal = Cash-in
4.3.3.2 Additions = Cash-Out
4.3.4 Investing activities