Question

Download the annual financial reports of BHP Ltd, Santos Ltd, and Funtastic Ltd for the year 2019, 2018 and 2017. Examine the consolidated Cash Flow Statements for each companies across three years. Answer the following questions about each of the three cash-flow statements. 1. For each companies [except mentioned otherwise as in c), g) and i) below], across three years on the Statement of Cash Flows discuss: a) What are the major sources of cash for each firm? What are the major uses of cash for each firm? b) What was the trend in cash flow from (continuing) operations for each firm? c) Compare and contrast the cash flow from operations with the net profit after tax in income statement. Explain in detail the major reasons for the difference between these two figures. (Answer this question using only the Cash flow statement for BHP Limited). d) Was the firm able to generate enough cash from operations to pay for all of its capital expenditures? e) Did the cash flow from operations cover the dividend payment made by the firm (if any)? f) If the firm has generated excess cash from operations, how did the firm invest the excess cash? If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends? g) Did the firm use the working capital (current asset and current liability) accounts other than cash and cash equivalents as sources of cash, or uses of cash? (Answer this question using only the Cash flow statement for BHP Limited). h) What other major items affected cash flows for each firm? i) What was the trend in capital expenditures for each firm? j) What was the trend in dividends (if any) for each firm? k) What was the trend in net borrowing (proceeds from borrowing less payments of short- and long-term debt) for each firm? l) What was the trend in working capital accounts? (Answer this question using only the Cash flow statement for BHP Limited).

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Answer 1

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a. BHP Ltd Santos Ltd funtastic Ltd 2019 2018 2017 2019 2018 2017 2019 2018 2017 The company major cash flows Sale of onshore divestment of The company major cash flows are receipts from are receipts from customers and 15,813 in 2019 and in 2018 & customers,share issue and drawdown borrowings in 2019- 2017 they have received dividend proceeds from borrowings in 2018 income and interest income 2019-2018 b. Cashflow from continuing operations are substantially negative in 2019 and in 2018 & 2017 it is slighity positive In 2019 cashflow from continuing in 2019 cashflow from continuing operations is slighylt negative operations is slighylt negative and slightly positive in 2018-2017 and slightly positive in 2018-2017 Major reason is depreciation and ammortization, finance costs expenses and equity investments impairments. These are non cash itmes that affect income statement d. The company cash from The company cash from The company has not incurred operations is greater than capital operations is greater than capital any capital expenditure. Further expenditures incurred during expenditures incurred during inadeuate cash is generated to respective years respective years meet capital expenditures e. No dividends paid Inadequate cash generated as Inadequate cash generated as dividends paid are on higher side dividends paid are on higher side f. Divestment in US supported cash Company receipts from customers were utilized for flows for payments and repayment of borrowings and dividends paid payments to suppliers and employees Company receipts from customers were utilized for repayment of borrowings and payments to suppliers and employees & The working capital is used for cash payments h. Capital expenditures, royalty Receipts and payments to payments,depreciation dividends customers and suppliers,oil and paid affected cash flow gas assets,repayment of statements borrowings Receipts and payments to customers and suppliers,oil and gas assets, repayment of borrowings i. the trend increased in each year.It was 3,274,5060,7,377 in 2017,2018,2019 respectively It was downward as it was 2,373 It was downward as it was 298 in in 2018 and 1,033 in 2019 2018 and 151 in 2019 j. Increasing trend in each succeeding year Increasing trend in each succeeding year No dividends paid k. continous repayment in each succeeding years as no new borrowings raised Net increase in reapyment borrowings in 2019. in 2018 net increase in raising borrowings Net increase in reapyment borrowings in 2019. in 2018 net increase in raising borrowings 1. working capital increased in 2019 and decreased in 2018-2017