Question

XYZ Ltd. has a revenue of Rs. 8,00,000 and it has provided for depreciation at 10% SLM method. It has cash expenses of R.2,00,000. The taxes are 50% p.a. show the net earning on accounting approach basis and cash flow basis. explain it

Answer 1

Cash flow from assets - Operating cash flow 90 - Net capital spending (105) - Decrease in net working capital 35 - Cash flow from assets 20 B. Cash flow to creditors - Interest paid 25 - Repayment of long term debt (15) - Cash flow to creditors 10 C. Cash flow to shareholders - Dividends paid 10 - Net new equity raised 0 - Cash flow to shareholders 10 We find that (A) = (B) + ( C) i.e., Cash flow from assets = Cash flow to creditors + Cash flow to shareholders 4. The comparative

XYZ Ltd. has a revenue of Rs. 8,00,000 and it has provided for depreciation at 10% SLM method. It has cash expenses of R.2,00,000. The taxes are 50% p.a. show the net earning on accounting approach basis and cash flow basis