INCOME STATEMENT Income from ordinary activities Costo of sales Gross profit as at 31 December 2022 in ThCh$ 39,547,393 (25,915,295) 13,632,098 Depreciation of the year (761,431) Salaries and other personnel expenses (1,778,269) Administration expenses (4,828,694) Rent (560,000) Profit from operating activities 5,703,704 Financial incomes 214,773 Financial costs (705,852) Profit before tax Income tax expense Profit of the year 5,212,625 (1,407,991) 3,804,634 ASSETS Current assets Cash and cash equivalents as at 31 December 2021 in ThCh$ as at 31 December 2022 in variation ThCh$ EQUITY AND LIABILITIES ThCh$ Current liabilities as at 31 December 2021 in ThCh$ as at 31 December 2022 in variation ThCh$ ThCh$ 3,222,657 4,260,292 1,037,635 Short-term debt 7,377,665 10,053,044 2,675,379 Trade and other Trade and other 9,730,274 12,353,520 2,623,246 9,989,639 11,723,804 1,734,165 receivables, current payables, current Curren tax Inventories 17,930,433 20,781,657 2,851,224 1,869,601 1,945,678 76,077 liabilities Current provisions Prepaid rent 123,000 75,000 (48,000) for employee 346,651 447,527 100,876 benefits VAT credit 15,345 17,376 2,031 VAT debit 17,654 Marketing Tax assets, current 1,016,319 817,339 (198,980) 372,414 21,730 418,801 4,076 46,387 expenses payable Total current Total current assets 32,038,028 38,805,184 19,973,624 24,610,584 liabilities No current assets No current liabilities Intangible assets 194,297 173,683 other than goodwill (20,614) Long-term debt 4,847,610 3,918,161 (929,449) Goodwill 646,675 646,675 Total no current liabilities 4,847,610 3,918,161 Property, plant and 7,758,979 8,481,168 722,189 TOTAL LIABILITES 24,821,234 28,528,745 equipment, net Total no current assets 8,599,951 9,301,526 EQUITY Issued capital 10,566,866 10,566,866 Retained earnings Total equity 5,249,879 8,511,099 3,261,220 15,816,745 19,077,965 TOTAL EQUITY TOTAL ASSETS 40,637,979 47,606,710 40,637,979 47,606,710 AND LIABILITES

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 16MCQ

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Question

Company “Maquinaria San José” has submitted its Consolidated Financial Statements for year 2022 to Banco Andes. Below is company's Balance Sheet and Income Statement in thousands of pesos (ThCh$) (see attached images below)

As a credit risk analyst at “Banco Andes” you have been given the task of:

Prepare Cash Flow Statement for this company using the Direct Method. Following additional information has been provided by company to facilitate preparation of Cash Flow Statement:
Formulas and calculations performed for each item in Cash Flow Statement should be shown.
VAT rate is 19%.
Company took on new short-term debt of $3,000 million in 2022 with “Banco Andes”. Bank requires that Cash Flow from Financing Activities be presented with an opening between New Debt and Paid Short-Term and Long-Term Debt.
Marketing expenses are included within Selling and Administrative Expenses (SAE).
Salaries expenses include effect of employee benefit provisions
In addition, Bank's senior management asks you to answer and substantiate following questions:
Indicate main reasons for change in cash balance between 2021 and 2022.
Is company investing sufficiently?
How was company financed in 2022?
Are dividends paid in 2022 excessive?
In summary, what is your opinion of evolution of company's cash flow in 2022? If you were to classify this company's cash performance in following categories: Green (positive), Yellow (caution) or Red (danger), what would your classification be?

INCOME STATEMENT
Income from ordinary activities
Costo of sales
Gross profit
as at 31 December
2022 in ThCh$
39,547,393
(25,915,295)
13,632,098
Depreciation of the year
(761,431)
Salaries and other personnel expenses
(1,778,269)
Administration expenses
(4,828,694)
Rent
(560,000)
Profit from operating activities
5,703,704
Financial incomes
214,773
Financial costs
(705,852)
Profit before tax
Income tax expense
Profit of the year
5,212,625
(1,407,991)
3,804,634

ASSETS
Current assets
Cash and cash
equivalents
as at 31
December
2021 in
ThCh$
as at 31
December
2022 in
variation
ThCh$
EQUITY AND
LIABILITIES
ThCh$
Current liabilities
as at 31
December
2021 in
ThCh$
as at 31
December
2022 in
variation
ThCh$
ThCh$
3,222,657
4,260,292 1,037,635
Short-term debt
7,377,665
10,053,044 2,675,379
Trade and other
Trade and other
9,730,274
12,353,520 2,623,246
9,989,639
11,723,804 1,734,165
receivables, current
payables, current
Curren tax
Inventories
17,930,433
20,781,657 2,851,224
1,869,601
1,945,678
76,077
liabilities
Current provisions
Prepaid rent
123,000
75,000
(48,000)
for employee
346,651
447,527 100,876
benefits
VAT credit
15,345
17,376
2,031
VAT debit
17,654
Marketing
Tax assets, current
1,016,319
817,339 (198,980)
372,414
21,730
418,801
4,076
46,387
expenses payable
Total current
Total current assets
32,038,028
38,805,184
19,973,624 24,610,584
liabilities
No current assets
No current
liabilities
Intangible assets
194,297
173,683
other than goodwill
(20,614)
Long-term debt
4,847,610 3,918,161 (929,449)
Goodwill
646,675
646,675
Total no current
liabilities
4,847,610 3,918,161
Property, plant and
7,758,979
8,481,168
722,189
TOTAL LIABILITES
24,821,234 28,528,745
equipment, net
Total no current
assets
8,599,951 9,301,526
EQUITY
Issued capital
10,566,866 10,566,866
Retained earnings
Total equity
5,249,879 8,511,099 3,261,220
15,816,745 19,077,965
TOTAL EQUITY
TOTAL ASSETS
40,637,979 47,606,710
40,637,979 47,606,710
AND LIABILITES

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