The definition of cash used by the company to prepare its statement of cash flow include following headings-
? Cash and cash equivalent – The cash and cash equivalent include Cash at Bank on hand for the organization and the Short Term Deposits of the organization.
? Bank overdraft.
For the purposes of the Cash Flow Statement, the company has considered cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. . (Annual Report FY12- PP. 91)
The net operating cash flows of the company for FY12 are $196737000 which is higher than FY11 when the net operating cash flows were $182438000. The headings to calculate the net operating cash flows include-
? Receipts from customers (inclusive of GST) – Cash Inflow
? Payments to suppliers and employees (inclusive of GST) – Cash Outflow
? Commissions received – Cash Inflow
? Interest received – Cash Inflow
? Borrowing costs paid – Cash Outflow
? Income tax paid – Cash Outflow
Some of the headings here are closely related to the company’s main business of retail such as Receipts from customers, Payments to suppliers and employees and Commissions received. This is because the cash flow from these headings is due to company’s operations such as receipts from customer is by selling the products to its customers. Similarly the payment to suppliers to provide the goods to be sold and payment to employees as their salaries are also done to continue the business. However the remaining others are not much related to its main business as these cash flow headings are not much linked with its business activities. For example, the Interest received is from the cash deposited at banks and thus not related to its business of retail and the borrowing cost paid is to the creditors for providing the loans which is again not connected to the retail business. . (Annual Report FY12- PP. 75)