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HI5020 Examination of Cash Flow Statement of BHP Ltd, Santos Ltd and Funtastic Ltd Assessment Answer

Assessment Details and Submission Guidelines
Trimester
T2 2020
Unit Code
HI5020
Unit Title
Corporate Accounting
Assessment Type
Individual Assignment
Assessment Title
Issues in Cash Flow Statement
Purpose of the assessment (with ULO Mapping)
This assignment aims at developing a clear understanding of students about income statement and cash flows statement; and use of cash flow statement to comprehend different key business decisions taken by the management. They will have to consult relevant literature and demonstrate understanding of key concepts. As part of their assignment, they will also conduct
an empirical analysis on cash flow statement. (ULO 1, 2, 4, 5, 6)
Weight
40 % of the total assessments (Written assignment 30 % + Presentation 10 percent)
Total Marks
Written assignment 30 marks + Presentation 10 marks
Word limit
3,000 words ± 500 words
Submission Guidelines
  • All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.
  • The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.
  • Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.

Assignment Specifications

Assessment task:

Part A

Review the existing literature to critically examine the relative information content of the income statement and the statement of cash flows. Why do investors find both income statement and statement of cash flows useful?

Part B

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:
    1. What are the major sources of cash for each firm? What are the major uses of cash for each firm?
    2. What was the trend in cash flow from (continuing) operations for each firm?
    3. 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).
    4. Was the firm able to generate enough cash from operations to pay for all of its capital expenditures?
    5. Did the cash flow from operations cover the dividend payment made by the firm (if any)?
    6. 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?
    7. 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).
    8. What other major items affected cash flows for each firm?
    9. What was the trend in capital expenditures for each firm?
    10. What was the trend in dividends (if any) for each firm?
    11. What was the trend in net borrowing (proceeds from borrowing less payments of short- and long-term debt) for each firm?
    12. What was the trend in working capital accounts? (Answer this question using only the Cash flow statement for BHP Limited).
  2. Critically evaluate the financial strength of each of the three companies based on the evidence presented in the Statement of Cash Flows, and your answers in (1) above.
  3. If you are asked to evaluate these three companies for lending purposes, which of the three companies you will select for lending? Explain Why.

Assignment Structure should be as the following:

Instruction for video presentation:

Based on your written assignment, you will have to make a summary video presentation ranging for 10 minutes. Your presentation should explain the assignment tasks and your key findings. You will have to upload the presentation in YouTube and submit the YouTube link in the blackboard so that the marker can watch and mark your presentation. Your assignment will be marked based on the following criteria:



Presentation Style (3
marks)
Content (4 marks)
Clarity of the
presentation ((3 marks)
Excellent
3-2.5
4-3
3-2.5
Very good
2.5-1.75
3-2.5
2.5-1.75
Good
1.75-1.5
2.5-2.00
1.75-1.5
Satisfactory
1.5-1.00
2.00-1.00
1.5-1.00
Unsatisfactory
1.00-0
1.00-0
1.00-0


Answer

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