You are a finance director of GHT Plc,that deals in the importation and selling of solar panels. The company has been operating for the past two (2) years. Find below the Statement of Financial Position as at 31st Dec. 2017 and 2018 and the Income Statement for the same period. [ GHT PLC] A). Statement of financial position as at 31stDec. 2017 2018 K K Assets Non-Current Assets Property, Plant & Equipment 4,300 11,040 Goodwill 2,000 2,000 Intangible Assets 3,000 3,000 9,300 16,040 Current Assets Inventories 4,900 3,000 Trade Receivables 780 500 Cash and cash equivalents 600 450 6,280 3,950 Total Assets 15,580 19,990 Equity and Liabilities Equity Share Capital 5,000 5,000 Retained Earnings 6,820 10,000 Revaluation Reserve 450 650 Total Equity 12,270 15,650 Non-current liabilities 560 260 Long-term borrowings 1,500 2,500 Current Liabilities Trade and other payables 500 600 Short-term borrowings 250 300 Current portion of long-term borrowings 350 580 Current tax payable 150 100 Total current liabilities 1,250 1,580 Total liabilities 3,310 4,340 Total equity and liabilities 15,580 19,990 [ GHT PLC] B). Income Statement as at 31st Dec. 2017 2018 K K Net Sales 19,000 10,000 Operating costs excluding depr. and amort. 4,500 2,000 EBITDA 14,500 8,000 Depreciation 4,000 3,500 Armotisation 600 750 Depreciation and Armotisation 4,600 4,250 Oprating Income 9,900 3,750 Less: Interest 2,500 1,500 Earnings before taxes (EBT) 7,400 2,250 Taxes(35%) 2,590 788 Net income before preferred dividends 4,810 1,463 Preferred Dividends 1,000 1,000 Net Profit 3,810 463 Common dividends 200 200 Required: I. Why do you think it is necessary to prepare Cash flow Statement and what are the various categories of the cash flow statement? II. Given the statement of financial position and the income statement of GHT Plc as at 31st December, 2018 and 2017, you are required to prepare a statement of Cash-flow as at 31st Dec. 2018.
You are a finance director of GHT Plc,that deals in the importation and selling of solar panels. The company has been operating for the past two (2) years. Find below the
[ GHT PLC]
A). Statement of financial position as at 31stDec.
2017 2018
K K
Assets
Non-Current Assets
Property, Plant & Equipment 4,300 11,040
Intangible Assets 3,000 3,000
9,300 16,040
Current Assets
Inventories 4,900 3,000
Trade Receivables 780 500
Cash and cash equivalents 600 450
6,280 3,950
Total Assets 15,580 19,990
Equity and Liabilities
Equity
Share Capital 5,000 5,000
Revaluation Reserve 450 650
Total Equity 12,270 15,650
Non-current liabilities 560 260
Long-term borrowings 1,500 2,500
Current Liabilities
Trade and other payables 500 600
Short-term borrowings 250 300
Current portion of long-term borrowings 350 580
Current tax payable 150 100
Total current liabilities 1,250 1,580
Total liabilities 3,310 4,340
Total equity and liabilities 15,580 19,990
[ GHT PLC]
B). Income Statement as at 31st Dec.
2017 2018
K K
Net Sales 19,000 10,000
Operating costs excluding depr. and amort. 4,500 2,000
EBITDA 14,500 8,000
Armotisation 600 750
Depreciation and Armotisation 4,600 4,250
Oprating Income 9,900 3,750
Less: Interest 2,500 1,500
Earnings before taxes (EBT) 7,400 2,250
Taxes(35%) 2,590 788
Net income before preferred dividends 4,810 1,463
Preferred Dividends 1,000 1,000
Net Profit 3,810 463
Common dividends 200 200
Required:
I. Why do you think it is necessary to prepare Cash flow Statement and what are the various categories of the cash flow statement?
II. Given the statement of financial position and the income statement of GHT Plc as at 31st December, 2018 and 2017, you are required to prepare a statement of Cash-flow as at 31st Dec. 2018.
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