Financial Analysis Statement : An Introduction to Concepts
Answer:
Income Statement:-
|
In the books of BreathScreen Inc. | |||
|
Income Statement:- | |||
|
for the year ended on 31st December,2013 | |||
|
|
Particulars |
Amount |
Amount |
|
|
|
|
($) |
|
|
Sales Revenue |
|
23,000,000 |
|
|
Other Operating Revenue |
|
- |
|
|
Total Revenue |
|
23,000,000 |
|
|
Cost of Goods Sold |
|
(8,100,000) |
|
|
Gross Profit |
|
14,900,000 |
|
|
License Fees |
(3,000,000) |
- |
|
|
Less: Prepaid Fees |
(250,000) |
(2,750,000) |
|
|
Salaries |
|
(3,700,000) |
|
|
Manufacturing Overhead Expenses |
|
(2,000,000) |
|
|
Advertisement |
|
(2,000,000) |
|
|
Depreciation on Machinery |
|
(3,000,000) |
|
|
Amortization on Trademark |
|
(600,000) |
|
|
Net Operating Income |
|
850,000 |
|
|
Interest Received |
|
200,000 |
|
|
Revaluation Surplus |
|
4,600,000 |
|
|
Earnings before Interest & Taxes |
|
5,650,000 |
|
|
Finance Cost |
|
(300,000) |
|
|
Profit Before Income Tax |
|
5,350,000 |
|
|
Income Tax Expenses @ 17% |
|
(909,500) |
|
|
Net Profit for the Period |
|
4,440,500 |
Balance Sheet:-
|
In the books of BreathScreen Inc. | |||
|
Balance Sheet:- | |||
|
for the year ended on 31st December,2013 | |||
|
|
Particulars |
Amount |
Amount |
|
|
Current Asset: |
|
|
|
|
Accounts Receivable |
|
9,600,000 |
|
|
Cash in Hand |
|
18,690,500 |
|
|
Closing Stock |
|
900,000 |
|
|
Prepaid Expenses |
|
250,000 |
|
|
Total Current Assets |
|
29,440,500 |
|
|
Fixed & Non-Current Assets:- |
|
|
|
|
Machinery |
13,500,000 |
|
|
|
Add: Installation Cost |
1,500,000 |
|
|
|
|
15,000,000 |
|
|
|
Less: Accumulated Depreciation |
(3,000,000) |
12,000,000 |
|
|
Trademark |
|
10,000,000 |
|
|
Technology |
|
2,000,000 |
|
|
Total Fixed & Non-Current Assets |
|
24000000 |
|
|
TOTAL ASSETS |
|
53,440,500 |
|
|
Current Liabilities: |
|
|
|
|
Accounts Payable |
|
3,000,000 |
|
|
Total Current Liabilities |
|
3,000,000 |
|
|
Non-Current Liabilities:- |
|
|
|
|
Loan from Bank |
|
6,000,000 |
|
|
Total Current Liabilities |
|
6,000,000 |
|
|
TOTAL LIABILITIES |
|
9,000,000 |
|
|
Equity Capital: |
|
|
|
|
Share Capital |
|
40,000,000 |
|
|
Retained Earnings |
- |
|
|
|
Add: Net Profit After Tax |
4,440,500 |
4,440,500 |
|
|
Total Equity Capital |
|
44,440,500 |
|
|
TOTAL EQUITY & LIABILITIES |
|
53,440,500.00 |
Cash Flow Statement under Indirect Method:-
|
In the books of BreathScreen Inc. | |||
|
Cash Flow Statement:- | |||
|
for the year ended on 31st December,2013 | |||
|
|
Particulars |
Amount |
Amount |
|
|
Cash Flow from Operating Activities:- |
|
|
|
|
Net Operating income |
|
850,000 |
|
Less : |
Tax Expenses |
|
(909,500) |
|
|
Net Operating Loss After Tax |
|
(59,500) |
|
Add: |
Depreciation & Amortization: |
|
|
|
|
Depreciation on Machinery |
3,000,000 |
|
|
|
Amortization of Trademark |
600,000 |
3,600,000 |
|
Add: |
Increase in Current Liabilities: |
|
|
|
|
Increase in Accounts Payable |
3000000 |
3000000 |
|
Less: |
Increase in Current Assets: |
|
|
|
|
Increase in Accounts Receivable |
(9,600,000) |
|
|
|
Increase in Closing Stock |
(900,000) |
|
|
|
Increase in Prepaid Expenses |
(250,000) |
(10,750,000) |
|
|
Net Cash Outflow from Operating Activities |
|
(4,209,500) |
|
|
Cash Flow from Financing Activities:- |
|
|
|
|
Issue of Share Capital in Cash |
|
34,000,000 |
|
|
Loan from Capital |
|
6,000,000 |
|
|
Finance Cost |
|
(300,000) |
|
|
Interest Received on Bank Account |
|
200,000 |
|
|
Net Cash Inflow from Financing Activities |
|
39,900,000 |
|
|
Cash Flow from Investment Activities:- |
|
|
|
|
Purchase of Machinery |
|
(13,500,000) |
|
|
Installation of Machinery |
|
(1,500,000) |
|
|
Purchase of Technology |
|
(2,000,000) |
|
|
Net Cash Inflow from Financing Activities |
|
(17,000,000) |
|
|
Net Cash Increase/(Decrease) for the Year |
|
18,690,500 |
|
Add : |
Opening Cash Balance |
|
0 |
|
|
Closing Cash Balance |
|
18,690,500 |
Bibliography:-
Christensen, T. E., Baker, R. E., & Cottrell, D. M. (2014). Advanced Financial Accounting. The McGraw-Hill Companies, Inc
Deegan, C. (2013). Financial accounting theory. McGraw-Hill Education Australia
Horngren, C., Harrison, W., Oliver, S., Best, P., Fraser, D., & Tan, R. (2012).Financial Accounting. Pearson Higher Education AU
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to concepts, methods and uses. Cengage Learning
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