Reading a business through its numbers: the three statements, cash and value
Building the cash flow statement and checking the links
| Line | Amount |
|---|---|
| Revenue | 300 |
| Cost of goods sold | -180 |
| Gross profit | 120 |
| Operating expenses | -60 |
| EBITDA | 60 |
| Depreciation | -15 |
| EBIT (operating profit) | 45 |
| Interest on the bank loan | -5 |
| Profit before tax | 40 |
| Tax at 25 percent | -10 |
| Net profit | 30 |
The prompt
Harbour Furniture made the profit shown in the P&L above. During the year it also bought new machines for MYR 25 million. It repaid MYR 10 million of its bank loan and paid MYR 10 million of dividends. Build its cash flow statement and check that all three statements tie together.
Before you reveal anything, plan your own structure and first move on paper. Then reveal one part at a time and compare.