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4.14 Analysis of Financial Statements—CBSE XII
Solution: Bhushan Steel Ltd.
CASH FLOW STATEMENT for the year ended 31st March, 2024
Particulars ` `
(A) Cash Flow from Operating Activities
Net Profit (Note 1) 1,64,000
Add: Interim Dividend on Equity Shares Paid during the year 72,000
Provision for Tax 18,000
Dividend on Preference Shares 18,000
Net Profit before Tax and Extraordinary Items 2,72,000
Add: Non-Cash/Non-Operating Items:
Depreciation (Note 3) 52,000
Interest on Debentures (Note 5) 70,000
Provision for Doubtful Debts 12,000 1,34,000
4,06,000
Less: Gain(Profit) on Sale of Investments (being Investing Activity) 8,000
Gain (Profit) on Sale of Fixed Assets (being Investing Activity) 10,000 18,000
Operating Profit before Working Capital Changes 3,88,000
Add: Decrease in Current Assets:
Trade Receivables 2,28,000
Increase in Current Liabilities:
Trade Payables 1,20,000 3,48,000
7,36,000
Less: Increase in Current Assets:
Inventories 1,00,000
Cash Generated from Operations 6,36,000
Less: Tax Paid 18,000
Cash Flow from Operating Activities 6,18,000
(B) Cash Flow from Investing Activities
Purchase of Plant and Machinery (Notes 2 and 3) (6,40,000)
Sale of Plant and Machinery 34,000
Purchase of Investments (Note 4) (30,000)
Sale of Investments 28,000
Cash Used in Investing Activities (6,08,000)
(C) Cash Flow from Financing Activities
Proceeds from Issue of Equity Shares 2,00,000
Premium Received on Issue of Shares 10,000
Proceeds from Issue of Debentures 90,000
Redemption of Preference Shares (50,000)
Dividend Paid on Equity Shares (72,000)
Dividend on Preference Shares (18,000)
Interest on Debentures Paid (70,000)
Cash Flow from Financing Activities 90,000
Net Increase in Cash and Cash Equivalents (A + B + C) 1,00,000
Add: Cash and Cash Equivalents in the beginning of the year 2,08,000
Cash and Cash Equivalents at the end of the year 3,08,000

Working Notes:
1. Negative Surplus, i.e., Balance in Statement of Profit & Loss of ` 30,000 appearing in the previous year’s
Balance Sheet means the amount of loss. In the current year, after covering this loss of ` 30,000, surplus
of ` 1,34,000 is appearing on the liabilities side. It means that during the current year net profit earned
by the company is ` 1,64,000 (i.e., ` 1,34,000 + ` 30,000).