R18 Long-lived Assets: Implications for Financial Statements and ratios

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IFT Team

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Aug 6, 2013, 8:37:55 AM8/6/13
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Chintan Dave

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Mar 26, 2014, 2:02:17 PM3/26/14
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In R18, example 13, question 2 – Which Company reports higher cash from operations?

Solution states that cash from operations reported by DIRFIN are lower but investing cash flow are higher than LOPER.

Now the statement of cash flow looks like this –

 

 Year 1

 Year 2

 Year 3

 Year 4

Total

Operating cash flow

         32,860

         40,639

         39,195

         37,607

         150,302

Payments received on finance leases

         28,679

         21,547

         23,703

         26,072

         100,001

Investing cash flows

         28,679

         21,547

         23,703

         26,072

         100,001

Change in Cash

 

         250,302

 

So is the Investing cash flow negative by 100,001? i.e. cash received on finance lease is invested ? Because change is cash is 250,302. However, i don't understand how can Investing cash flow be higher?

 Kindly provide an explanation.


Thanks in advance.


Regards,

Chintan Dave




On Tuesday, August 6, 2013 6:07:55 PM UTC+5:30, IFT Team wrote:

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