Cash flow statement analysis

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Cash flow statement analysis : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 1 www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS Cash flow statement analysis AFTERSCHO?OL – DEVELOPING CHANGE MAKERS CENTRE FOR SOCIAL ENTREPRENEURSHIP PGPSE PROGRAMME – World’ Most Comprehensive programme in social entrepreneurship & spiritual entrepreneurship OPEN FOR ALL FREE FOR ALL

Cash flow statement analysis : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 2 www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS Cash flow statement analysis Dr. T.K. Jain. AFTERSCHO?OL Centre for social entrepreneurship Bikaner M: 9414430763 tkjainbkn@yahoo.co.in www.afterschool.tk, www.afterschoool.tk

What is cash? : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 3 What is cash? Cash or bank balance.

Methods of cash flow analysis? : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 4 Methods of cash flow analysis? 1. direct method 2. indirect method

Direct method : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 5 Direct method Here you have to take each item individually and prepare cash flow statement to show the net impact and identify the flow of cash.

Indirect method…. : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 6 Indirect method…. Take profit from P & L account and adjust it for non-cash items.

Three componenents of cash flow statement… : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 7 Three componenents of cash flow statement… Cash from operations Cash from financing Cash from investing

Cash from operations… : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 8 Cash from operations… Indirect method : Profit Add + all non cash expenses / provisions etc. Less = all non cash income etc.

Cash from financing : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 9 Cash from financing If equity, debt, etc. increased, that means, there is more cash from financing If equity, debt etc. decreased, that means there is application of cash.

Cash from investing…. : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 10 Cash from investing…. If fixed assets and investments increased, it means, there is application of cash If fixed assets & investments reduced, it means there is source cash and so cash from investing should increase.

What to add to profit (indirect method)? : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 11 What to add to profit (indirect method)? Depreciation Loss on sale of fixed assets Amortisation of intangible assets Impairment Bad debt Interest (it will go to cash from investing or cash fro financing acticity) (all other non – cash expenses/ provisions).

What to deduct from profit (indirect method) : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 12 What to deduct from profit (indirect method) Profit on sale of fixed assets

Example: : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 13 Example: Profit : 5000 (after deducting salary 1000, purchase 15000, depreciation 1000, goodwill written off 1000, rent 1000, wages 5000) Solution: Cash from operations (indirect method): 5000 + 1000 (dep) + 1000 (goodwill) = 7000 answer.

About AFTERSCHO?OL : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 14 About AFTERSCHO?OL PGPSE - World’s most comprehensive programme on social entrepreneurship – after class 12th Flexible – fast changing to meet the requirements Admission open throughout the year Complete support from beginning to the end – from idea generation to making the project viable.

Branches of AFTERSCHO?OL : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 15 Branches of AFTERSCHO?OL PGPSE programme is open all over the world as free online programme. Those who complete PSPSE have the freedom to start branches of AFTERSCHO?OL A few branches have already started - one such branch is at KOTA (Rajasthan).

Workshop on social entrepreneurship : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 16 Workshop on social entrepreneurship We conduct workshop on social entrepreneurship – all over India and out of India also - in school, college, club, association or any such place - just send us a call and we will come to conduct the workshop on social entrepreeurship. These workshops are great moments of learning, sharing, and commitments.

FREE ONLINE PROGRAMME : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 17 FREE ONLINE PROGRAMME AFTERSCHO?OL is absolutely free programme available online – any person can join it. The programme has four components : 1. case studies – writing and analysing – using latest tools of management 2. articles / reports writing & presentation of them in conferences / seminars 3. Study material / books / ebooks / audio / audio visual material to support the study 4. business plan preparation and presentations of those plans in conferences / seminars

100% placement / entrepreneurship : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 18 100% placement / entrepreneurship AFTERSCHO?OL has the record of 100% placement / entrepreneurship till date Be assured of a bright career – if you join AFTERSCHO?OL

Pursue professional courses along with PGPSE : 

2/5/2009www.afterschoool.tk AFTERSCHO?OL's MATERIAL FOR PGPSE PARTICIPANTS 19 Pursue professional courses along with PGPSE AFTERSCHO?OL permits you to pursue distance education based professional / vocational courses and gives you support for that also. Many students are doing CA / CS/ ICWA / CMA / FRM / CFP / CFA and other courses along with PGPSE. Come and join AFTERSCHO?OL