How Is Depreciation Shown on the Statement of Cash Flows
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Analysis of Cash Flow Ratios: a Study on CMC
Accounting 4 (2018) 41–52 Contents lists available at GrowingScience Accounting homepage: www.GrowingScience.com/ac/ac.html Analysis of cash flow ratios: A study on CMC Somnath Dasa* aAssistant Professor of Commerce, Rabindra Mahavidyalaya, Champadanga, Hooghly – 712401, India C H R O N I C L E A B S T R A C T Article history: Cash flow ratios help financial users get relevant information about financial resources for a Received January 9, 2017 given time. Cash flow ratios are now used more than the traditional ones because it is more Received in revised format effective and justified. Cash flow based ratios are especially surprising because they do not January 11 2017 only play a significant role in the credit rating of evaluation, but also forecast the failure of a Accepted March 7 2017 Available online corporation. In this study, we perform an empirical investigation on a company named CMC. March 7 2017 From the study, it is clear that the liquidity and solvency positions of the company were moderate whereas the company maintained low profitability. On the other hand, the efficiency Keywords: Liquidity and sufficiency ratios of the study give us a new look on financial judgement. Solvency Profitability Efficiency Sufficiency Ratios © 2017 Growing Science Ltd. All rights reserved. 1. Introduction Information related to cash flow helps financial statement users receive the relevant information concerning the use and source of financial resources over a given time period (Rose et al., 2007). Cash flow statement contains information associated with operating, investing purposes of financial analysis, because the effect of the traditional ratio analysis techniques has been well established in literature, and financial activities (Macve, 1997). -
The Wine Industry Audit Technique Guide
The Wine Industry Audit Technique Guide NOTE: This document is not an official pronouncement of the law or the position of the Service and cannot be used, cited, or relied upon as such. This guide is current through the publication date. Since changes may have occurred after the publication date that would affect the accuracy of this document, no guarantees are made concerning the technical accuracy after the publication date. Publication Date: March 2011 Table of Contents Introduction .............................................................................................................................................. 2 Chapter 1 - Overview of Winery/Vineyard Operations ............................................................................ 3 Farming ................................................................................................................................................. 3 Winery (Manufacturing) ....................................................................................................................... 4 Marketing/Sales .................................................................................................................................... 6 Chapter 2 - Pre-Audit Information Gathering ........................................................................................... 8 Information Sources .............................................................................................................................. 8 Chapter 3 - Audit Considerations ............................................................................................................. -
Capital/Fixed Assets Depreciation Schedule Updated: February 2021
Kentucky Department of Education Munis Guide Capital/Fixed Assets Depreciation Schedule Updated: February 2021 Capital/Fixed Assets Depreciation Schedule Office of Education Technology: Division of School Technology Services Questions?: [email protected] 1 | P a g e Kentucky Department of Education Munis Guide Capital/Fixed Assets Depreciation Schedule Updated: February 2021 OVERVIEW The Fixed Assets Depreciation Schedule provides a listing of asset details that were depreciated for the report year as posted from the Fixed Asset module for the report year. Asset descriptions and depreciation details are included such as estimated life, number of periods taken for the year, first and last year periods of depreciation and acquisition cost; all to assist auditors in verifying the depreciation calculation and amounts. The report also includes assets that have been fully depreciated but have a balance remaining of Life-To-Date accumulated depreciation for the reported year. The asset amounts are reported as posted from the Fixed Asset history detail records generated from the Fixed Asset module and does NOT include amounts generated from General Journal Entries. The Depreciation Schedule pulls from two different Fixed Asset sources: 1. Fixed Asset Master File Maintenance 2. Fixed Asset history records The Fixed Asset Master File Maintenance or Asset Inquiry is where the actual asset master records reside; where assets are added and maintained. Key fields and amounts such as the asset Acquisition cost field, Asset Type (Governmental or Proprietary), Class and Sub-class codes are pulled from the asset master file for the Depreciation Schedule. It is vital that these key fields are accurate and tie to the fixed asset history records. -
14. Calculating Total Cash Flows
Chapter 2 Lecture Problems 14. Calculating Total Cash Flows. Greene Co. shows the following information on its 2008 income statement: Sales = $138,000 Costs = $71,500 Other expenses = $4,100 Depreciation expense = $10,100 Interest expense = $7,900 Taxes = $17,760 Dividends = $5,400. In addition, you're told that the firm issued $2,500 in new equity during 2008, and redeemed $3,800 in outstanding long-term debt. a. What is the 2008 operating cash flow? b. What is the 2008 cash flow to creditors? c. What is the 2008 cash flow to stockholders? d. If net fixed assets increased by $17,400 during the year, what was the addition to NWC? a. To calculate the OCF, we first need to construct an income statement. The income statement starts with revenues and subtracts costs to arrive at EBIT. We then subtract out interest to get taxable income, and then subtract taxes to arrive at net income. Doing so, we get: Income Statement Sales $138,000 Costs 71,500 Other Expenses 4,100 Depreciation 10,100 EBIT $52,300 Interest 7,900 Taxable income $44,400 Taxes 17,760 Net income $26,640 Dividends $5,400 Addition to retained earnings 21,240 Page 1 Chapter 2 Lecture Problems Dividends paid plus addition to retained earnings must equal net income, so: Net income = Dividends + Addition to retained earnings Addition to retained earnings = $26,640 – 5,400 Addition to retained earnings = $21,240 So, the operating cash flow is: OCF = EBIT + Depreciation – Taxes OCF = $52,300 + 10,100 – 17,760 OCF = $44,640 b. -
Capitalization and Depreciation Procedures Policy
Capitalization and Depreciation Procedures Policy Capitalization Policies The following capitalization procedures will be applied to fixed assets as defined by the Financial Accounting and Reporting Manual for Higher Educations (FARM). 1. Land a. Capitalized at cost b. Land and structures purchased or donated together will be separated when possible and capitalized separately c. Cost of preparing the land for use will be capitalized, when material, along with the cost of the land 2. Buildings a. Capitalized if - i. $25,000.00 or more and a life expectancy of at least 10 years b. Additions and renovations will be capitalized if - i. Cost of the project is $25,000.00 or more, and ii. The renovation extends the useful life of the facility or modifies and/or upgrades a building, i.e., installation of updated fire alarms, removal of handicapped barriers, etc 3. Improvements other than buildings a. Capitalized if – i. $5,000.00 or more 1. Examples are parking lots, sidewalks, fiber optics, etc. 4. Equipment a. Capitalized if - i. Cost is $5,000 or more 1. The cost of the equipment will include the purchase price, freight cost, insurance while in shipment, installation cost, and other cost incurred to get the equipment ready for actual use ii. Acquired for use in operations and not held for resale iii. Useful life is long-term in nature - It must yield services for five years or more iv. It is not an integral part of another unit 5. Software a. Capitalized if - i. Cost is $5,000.00 or more ii. Useful life is five years or more iii. -
General IT Controls (GITC) Risk and Impact November 2018 Risk Advisory
General IT Controls (GITC) Risk and Impact November 2018 Risk Advisory General IT Controls (GITC) Table of Contents Introduction 02 IT scoping for evaluation of internal controls 04 Importance of GITC 06 Implications of GITC deficiencies 07 Stepping towards a controlled IT environment 08 Conclusive remarks 13 Impact of GITC failure on the overall ICFR framework 15 Contact 16 01 General IT Controls (GITC) Introduction The importance of information technology (IT) controls has recently caught the attention of organisations using advanced IT products and services. This thought paper has been developed for the management of companies that are required to establish framework on internal controls and to ensure its effective operation throughout the year. This document draws attention on how applications should be scoped-in for monitoring internal controls and how control gaps need to be assessed and concluded. Increasing complexity of the IT setup has resulted in a greater focus around controls in the IT environment. With mandates emanating from various regulations, internal controls have gained more momentum in India during recent years. There is a trend of automation in processes and controls by adoption of advanced IT products and services for enabling greater efficiency in operations, compliance and reporting activities. This requires an increased focus on effective operation of controls around IT assets and services. Internal Financial Controls over Financial Reporting “Internal controls” refers to those activities within a company that are placed by the management to mitigate the risks that could hinder the company from achieving its objectives. Under the Committee on Sponsoring Organizations (COSO) framework revised in May 2013, there are three types of objectives which internal controls need to meet, as depicted below: Compliance Operations Reporting 02 General IT Controls (GITC) In many cases, a control may address more than one of COSO Cube (2013) these objectives. -
Cash Flow BCAS 18: Cash Flow
BANGLADESH COST ACCOUNTING STANDARDS BCAS - 18 Cash Flow BCAS 18: Cash Flow BCAS 18: Cash Flow 18.1 Introduction Cash flow in a company is a very important issue from managerial perspective. Forecasting cash flows are very important for decision making purposes. Reporting cash flow related information for internal decision making process receives extra attention along with external reporting. At the same time, management of cash flows on a regular basis is an important task of treasury now-a- days. The firms need to maintain a delicate balance between holding too much cash resulting into sacrifice of profitable investment opportunities and too little cash triggering unnecessary borrowing to support daily transactions. The purpose of this standard is to consider issues in developing and using cash flow information from a forward looking perspective. Sometimes it has been observed that in spite of adequate profit in business, they are unable to meet their taxes and dividends, just because of shortage of cash. Improving cash flow is a smart move for any business. It does not matter how great the business model is, how profitable it is, or how many investors the business has lined up. The business cannot survive if it fails to manage its cash properly. Given these trends, it is becoming increasingly important that cash flow information be prepared in a consistent and reliable manner. 18.2 Objectives The standard provides a basic guideline on forecasting cash inflows and outflows, reporting of cash flow related information, analyzing cash flow data and using cash flow data in different typical situations. The standard also highlights the importance of generating accurate cash flow information timely which is very important for cash flow management. -
Guideline Depreciation & Revenue Procedure 62-21
University of Mississippi eGrove Touche Ross Publications Deloitte Collection 1964 Guideline depreciation & revenue procedure 62-21 Gerald W. Padwe Follow this and additional works at: https://egrove.olemiss.edu/dl_tr Part of the Accounting Commons, and the Taxation Commons Recommended Citation Quarterly, Vol. 10, no. 1 (1964, March), p. 20-27 This Article is brought to you for free and open access by the Deloitte Collection at eGrove. It has been accepted for inclusion in Touche Ross Publications by an authorized administrator of eGrove. For more information, please contact [email protected]. Guideline Depreciation Revenue Procedure 62-21 u NTIL THE PROMULGATION of Revenue Procedure 62-21, or after July 12, 1962. The general rules provide that revenue agents examined depreciation deductions based assets are to be categorized by classes and a class life upon facts and circumstances which could be demon determined in accordance with technical rules set forth in strated by taxpayers in support of their useful lives. In Section 4 of the procedure and in Technical Information the absence of valid support, agents could fall back on Release (TIR) 399. If the class life used is greater than Bulletin F to determine an appropriate life. The Bulletin, or equal to the guideline life for a particular class of however, had not been revised since 1942 and did not assets, no adjustments to useful life may be made by an reflect current obsolescence and usage rates. The new examining agent for the first three years to which the Revenue Procedure is a result of the Treasury's efforts procedure applies (not necessarily the same as the first to update Bulletin F. -
Worldwide Capital and Fixed Assets Guide 2019 Portugal Russia Saudi Arabia Singapore South Africa 126 133 141 145 150
Worldwide Capital and Fixed Assets Guide 2019 Capital expenditures represent one of the largest items on a company’s balance sheet. This guide helps you to reference key tax factors needed to better understand the complex rules relating to tax relief on capital expenditure in 31 jurisdictions and territories. The content is based on current information as of February 2019 unless otherwise indicated in the text of the chapter. The tax rules related to capital expenditures across the world are constantly being updated and refined. This guide is designed to provide an overview. To learn more or to discuss a particular situation, please contact one of the country representatives listed in the guide. The Worldwide Capital and Fixed Assets Guide provides information on the regulations relating to fixed assets and depreciation in each jurisdiction, including sections on the types of tax depreciation, applicable depreciation rates, tax depreciation lives, qualifying and non-qualifying assets, availability of immediate deductions for repairs, depreciation and calculation methods, preferential and enhanced depreciation availability, accounting for disposals, how to submit a claim and relief for intangible assets. For the reader’s reference, the names and symbols of the foreign currencies that are mentioned in the guide are listed at the end of the publication. This is the second publication of the Worldwide Capital and Fixed Assets Guide. For many years, the Worldwide Corporate Tax Guide has been published annually along with two companion guides on broad- based taxes: the Worldwide Personal Tax Guide and the Worldwide VAT, GST and Sales Tax Guide. In recent years, those three have been joined by additional tax guides on more specific topics, including the Worldwide Estate and Inheritance Tax Guide, the Worldwide Transfer Pricing Reference Guide, the Global Oil and Gas Tax Guide, the Worldwide R&D Incentives Reference Guide and the Worldwide Cloud Computing Tax Guide. -
2018 Worldwide Capital and Fixed Assets Guide
Worldwide Capital and Fixed Assets Guide 2018 Capital expenditures represent one of the largest items on a company’s balance sheet. This guide helps you to reference key tax factors needed to better understand the complex rules relating to tax relief on capital expenditure in 29 jurisdictions and territories. The content is based on information current as of February 2018 unless otherwise indicated in the text of the chapter. The tax rules related to capital expenditures across the world are constantly being updated and refined. This guide is designed to provide an overview. To learn more or discuss a particular situation, please contact one of the country representatives listed in the guide. The Worldwide Capital and Fixed Assets Guide provides information on the regulations relating to fixed assets and depreciation in each jurisdiction, including sections on the types of tax depreciation, applicable depreciation rates, tax depreciation lives, qualifying and non-qualifying assets, availability of immediate deductions for repairs, depreciation and calculation methods, preferential and enhanced depreciation availability, accounting for disposals, how to submit a claim, and relief for intangible assets. For the reader’s reference, the names and symbols of the foreign currencies that are mentioned in the guide are listed at the end of the publication. This is the second publication of the Worldwide Capital and Fixed Assets Guide. For many years, the Worldwide Corporate Tax Guide has been published annually along with two companion guides on broad-based taxes: the Worldwide Personal Tax Guide and the Worldwide VAT, GST and Sales Tax Guide. In recent years, those three have been joined by additional tax guides on more specific topics, including the Worldwide Estate and Inheritance Tax Guide, the Worldwide Transfer Pricing Reference Guide, the Global Oil and Gas Tax Guide, the Worldwide R&D Incentives Reference Guide and the Worldwide Cloud Computing Tax Guide. -
Financial Ratios Ebook
The Corporate Finance Institute The Analyst Trifecta Financial Ratios eBook For more eBooks please visit: corporatefinanceinstitute.com/resources/ebooks corporatefinanceinstitute.com [email protected] 1 Corporate Finance Institute Financial Ratios Table of Contents Financial Ratio Analysis Overview ............................................................................................... 3 What is Ratio Analysis? .......................................................................................................................................................................................................3 Why use Ratio Analysis? .....................................................................................................................................................................................................3 Types of Ratios? ...................................................................................................................................................................................................................3 Profitability Ratio .......................................................................................................................... 4 Return on Equity .................................................................................................................................................................................................................5 Return on Assets .................................................................................................................................................................................................................6 -
Cash Flow Ratios As a Yardstick for Evaluating Financial Performance in African Businesses
University of Wollongong Research Online University of Wollongong in Dubai - Papers University of Wollongong in Dubai January 2006 Cash flow atiosr as a yardstick for evaluating financial performance in African businesses Leonie Jooste University of Wollongong, [email protected] Follow this and additional works at: https://ro.uow.edu.au/dubaipapers Recommended Citation Jooste, Leonie: Cash flow atiosr as a yardstick for evaluating financial performance in African businesses 2006, 569-576. https://ro.uow.edu.au/dubaipapers/111 Research Online is the open access institutional repository for the University of Wollongong. For further information contact the UOW Library: [email protected] CASH FLOW RATIOS AS A YARDSTICK FOR EVALUATING FINANCIAL PERFORMANCE IN AFRICAN BUSINESSES Ms. L. Jooste, Department of Applied Accounting, Port Elizabeth Technikon, Port Elizabeth, South Africa. Fax: +27 41 5049823, E-mail: [email protected] Abstract With the introduction of SFAS 95 and IAS 7, the cash flow statement became an integral part of financial statements. Many authors agree on the importance of cash flow for financial analysis, but to date neither text writers nor analysts have developed a set of cash flow ratios for performance evaluation. Giacomino and Mielke (1993) proposed operating cash flow ratios for relative performance evaluation. Ratios were calculated for companies in the United States (US) in the chemical, food and electronic industries. Three-year averages or industry norms were calculated, indicating that the potential existed to develop benchmarks for the ratios by industry. With globalization and expansion of international trade it has become important to increase the quality of financial reporting.