F) Analyze the cash flow statements of the selected companies for the past three years
Since the company is usually generating/using cash in several different ways, the analysis of cash flow statement is separated into three sections: cash flow from operating activities, from investing activities, and from financing activities.
Cash flow in operating activities:
The cash flows from operating activities section refers to the amount of cash a company generated from its core business, as opposed to peripheral activities such as investing or borrowing.
The result shows that the net cash generated from operating activities for the past three years is RM1,589,575(2007), RM 2,038,491(2008), and RM1655,180(2009) respectively. In the other word, it indicates that DIGI.cop has generated positive cash inflow from operating activities for all of the past three years. As shown in above, they have generated the greatest cash inflow among all three years in year 2008 that is RM 2,038,491, which is an increase of RM448, 916 as compared to year 2007, and decrease of RM383,311 as compared to year 2009..
The reasons justify the increase in net cash from operating activities from year 2007 to year 2008 are supporting by several factors:
Adjustments:
Increase in allowances for doubtful debts
Unrealised foreign exchange gain
Changes in working capital:
Increase in payable at the end of year 2008- meaning that the firm is able to pay the creditors/suppliers more slowly, which is a positive event for cash flow.
Increase/(decrease) in deferred-????
revenue
Interest paid
Payments for employee
related benefits
The reasons justify the decrease in net cash from operating activities from year 2008 to year 2009 are supporting by several factors:
They have a lower net income, that is the starting point of how much cash a company provides from its operations as compared to year 2008.
Adjustment:
Interest income
Property, plant and equipment written-off
Provision for...