Name : Swarnabha Seth Roll No: 038epgp11 All values are in USD '$'

FRA Assignment 1

Chemlite Cash Flow Statement

Net Cash flow from operating activities Net income Noncash expenses, revenues, gains and losses in income Depreciation Accounts Receivable Raw Materials Cost Amortisation Taxes payable Inventory Finished goods Depreciation on finished goods Gain on sale of equipment Deferred income tax Prepaid Insurance Net Cash Flow from operating activities Cash Flow from investing activities New equipment bought half paid New land bought half paid New Machine bought Selling of old machine Net cash flow from investing activities Cash Flow from Financing activities Cash dividend paid Share purchased from investor Short term debt Long term debt Net Cash Flow from financing activity 118995 61625 -70030 -20450 25000 -950 -104680 5000 -24250 26730 -65000 -48010

-300000 -125000 -520000 215500 -729500

-10000 -26000 200000 510000 674000 -103510

Net increase or decrease in cash

Name : Swarnabha Seth Roll No: 038epgp11 All values are in USD '$'

FRA Assignment 1

Chemlite Cash Flow Statement

Cash Flow from Operating Activities Cash collection Cash payments (purchases and OPEX) Materials Labor Inventory Rent Utilities Advertising R&D Insurance Selling and administration expense Interest Taxes Paid Total cash payments Net cash provided by operating activities Cash flows from Investing Activities Purchase of hard assets (machinery) Sold Existing Equipment Total Cash flows from investing Cash flows from Financing Activities Long-term Debt Short-term Debt Stock buyback Dividents Paid Total cash flow from financing Cash Summary 1816220 -473150 -660000 -99680 -25000 -82000 -70000 -63250 -97500 -195750 -58750 -39150 -1864230 -48010

-945000 215500 -729500

510000 200000 -26000 -10000 674000

Net Change in Cash

Cash on January 1, 1992 Cash on December 31, 1992 113000 9490

-103510

Name : Swarnabha Seth Roll No: 038epgp11 All values are in USD '$'

FRA Assignment 1

What are the main sources and uses of cash?

Sources of cash
Financing activities that is Short term and Long term debt Investing activities - activities that is Selling of old equipments

Uses of cash
Operating activties - Raw materials Operating Activities - Inventory of finished goods Financing Activities - New investments made Financing activities - cash dividend Paid

What would you recommend to Alexander?

Chemalite is in a situation where cash outflow during the period are higher than the cash inflows during the same period. As this is a forecasted cashflow, Alexander needs to start worrying about the cash position towards end of December from now onwards . The uses of cash is on higher side and mainly due to large investment into inventory. Chemalite is trying to overcome the situation by arranging long term and short term debt. However, this might not be useful since it will result in increase in higher liability and increase in interest payable there of. Alexander should adapt a "conservative" approach and cut down on spending in terms of new equipments.As per the income statement there is a significant increase in revenue so the company is doing well in terms of generating sales. Now lets see the few ratios: Cash realization ratio = cash generated by operations/net income = -0.5. The company has to work hard in terms of realizing the cash. Ratio of cash generated by operations to total debt = -0.8 shows that the company's credit worthiness is not good and it may not get further loans