Critically evaluate and compare the firm’s Profit and Loss Statement and the Cash Flow Statement and explain whether the two are in harmony of each other. Make suggestions for improvement, in case you find any dissonance. STATEMENT OF CASH FLOWSFOR THE YEAR ENDED JUNE 30, 202020202019STATEMENT OF PROFIT OR LOSSRupeesRupeesFOR THE YEAR ENDED JUNE 30, 2020CASH FLOW FROM OPERATING ACTIVITIES20202019Cash (used inygenerated from operations(278,630,685)2,187,655,623RupeesRupeesPayments for:Employees retirement benefits(27,215,164)(266,895,528)(169,478,284)(27,412,125)(308,153,275)Finance costSales - net12,359,645,87712,346,174,829Income tax(151,161,822)Cost of sales(11,111,877,733) (10,733,443,352)Net cash (used in)/generated from operating activities(742,219,661)1,700,928,401Gross profit1,247,768,1441,612,731,477CASH FLOW FROM INVESTING ACTIVITIES(233,025,294)(155,084,179)(36,172,073)(223,401,105)(132,042,342)Distribution costPurchase of fixed assets(423,206,263)(578,941,580)Administrative expensesOther expensesProceeds from disposal of fixed assets679,00019,088,500(104,264,650)Net cash used in investing activities(422,527,263)(559,853,080)(424,281,546)(459,708,097)1,153,023,3806,804,907823,486,598CASH FLOW FROM FINANCING ACTIVITIESOther income32,500,619426,779,283Long term finances obtainedRepayment of long term financesNet increase/(decrease) in short term borrowingsDividend paid405,933,294(354,095,045)1,289,311,580(276,277,262)Operating profit855,987,2171,159,828,287(303,439,245)(955,515,714)(146,760,757)Finance cost(306,630,426)(371,504,106)Profit before taxation549,356,791788,324,181Net cash generated from/(used in) financing activities1,064,872,567(978,936,433)Provision for taxation(124,080,076)(152,899,408)(99,874,357)302,171,995162,138,888139,827,966205,141NET (DECREASEINCREASE IN CASH AND CASH EQUIVALENTSProfit after taxation425,276,715635.424,773CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAREFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS580,327Earnings per share - basic and diluted66.1298.79CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR202,877,965302,171,995 STATEMENT OF FINANCIAL POSITIONSTATEMENT OF FINANCIAL POSITIONAS AT JUNE 30, 2020AS AT JUNE 30, 202020202019RupeesRupees20202019EQUITY AND LIABILITIESRupeesRupeesSHARE CAPITAL AND RESERVESASSETSAuthorized capital6,500,000 (2019: 6,500,000) ordinary shares of Rs. 10 each65.000.00065.000.000NON-CURRENT ASSETSIssued, subscribed and paid-up capitalGeneral reserve64,320,00o64,320.0003,800,000,0003,500,000,000Accumulated profit25,227,232190,768,7623,811,341,459 || 3,781,059,74914,394,09514,394,095Fixed assetsTOTAL EQUITY3,889,547,2323,755,088,762Long term depositsLIABILITIES3,825,735,554 3,795,453,844NON-CURRENT LIABILITIES1,600.161.851226,379,287CURRENT ASSETSLong term finances1,959.432.883276,729,403Long term payablesEmployees retirment benefitsDeferred taxation150,094,896118,103,558Stores, spares and loose tools93,566,49787,837,2725,021,697,279|| 3.245,348,436212,161,009243,408, 108Deferred grant2,637,881Stock in trade2,601,056,0722,188,052,804Trade receivablesAdvances, deposits, prepayments and other receivables971.214.665816,681,600263,493,834CURRENT LIABILTIES149,907,892Trade and other payablesSales tax refundable171,809,277215,340,953642,118,345544,232,849371,896,299355,547,385Unclaimed dividend6,638,4045,053,216Advance income tax/income tax refundableAccrued interest/profitShort term borrowingsCurrent portion of non-current liabilities82,844,3983,480,258,20159,566,42875,540,323Bank balances202,877,965302,171,9952,190,946,621369,637.0926,936,293,526 5,333,097,8234,271,425,7763,185,410,101TOTAL LIABILITIES6,872,481,8485,373,462,905TOTAL ASSETS10,762,029,080 9,128,551,667CONTINGENCIES AND COMMITMENTSTOTAL EQUITY AND LIABILITIES10,762,029,0809,128,551,667

Both the statement some harmony and some contradict because profit 2020 has decreased from the 2019,…

Critically evaluate and compare the firm’s Profit and Loss Statement and the Cash Flow Statement and explain whether the two are in harmony of each other. Make suggestions for improvement, in case you find any dissonance.

Critically evaluate and compare the firm’s Profit and Loss Statement and the Cash Flow Statement and explain whether the two are in harmony of each other. Make suggestions for improvement, in case you find any dissonance.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

We have all heard of Return on Investment or (ROI). Please research anddescribe five other business metrics that you may use in your analysis withyour business plan.Also, please describe how these ratios are calculated for example...Quick Ratio or Acid Test, Cash + Accounts Receivable ÷ Current Liabilities.
How would non-financial performance indicators help to improve the performance of the company? Explain in detail.
What is the investment center manager's preferred technique of calculating investment turnover, residual income, and return on investment? Why is it so popular? And why is the other not preferred? Briefly explain.
Analyze prospective investment possibilities to make sure that company requirements and financial management plan are taken into account when choices are made.
Financial analysts have developed two performance measures: Market Value Added (MVA) and Economic Value Added (EVA). Discuss and explain both. Which is a better representative of the firm’s performance, and why?
How do you measure Return on Investment (ROI) of alogistics firm?
Predicting budgets, cash flows, and financial health may avail investors and companies to investment and market opportunities. How does one use financial statements to forecast the future needs of a business? What are some advantages of forecasting? Examples of investment and market opportunities that can be gained from proper financial statement forecasting?
Discuss how an organization could analyze investment prospects in order to guarantee that choices are made in accordance with the business's requirements and financial management plan.
Give an example of how the needs of a business and its financial management strategy may be taken into account when analyzing investment opportunities in order to guarantee that the best choices are selected.
Select all that is true about the role of financial managers and the types of financial decisions they make. Select one or more: a. Capital structure describes the mix of short-term liabilities a firm uses to finance its short-term assets. b. The optimal financial management strategy of a financial manager is to reduce the overall risk level of the firm. c. The duties of the financial manager includes determining the capital structure and which projects the firm should undertake. Od. Size and timing of cash flows is unimportant in a capital budgeting decision. e. Capital Budgeting function involves planning and determining the firm's short term investments. Of. Determining the appropriate level of inventory is a working capital management function. ZA do W X L
Discuss how a financial manager can use ‘current ratio’ and ‘debt ratio’ in ratio analysis to better manage a firm.
What is the investment center manager's preferred method for determining investment turnover, residual income, and return on investment? Why is it so popular? And why is the other not preferred? Briefly explain.