Financial Analysis Statement An Introduction to Concepts

Question: 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