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Fsa Cash Flow Analysis for the Year Ended 31 December 2010

Essay by   •  December 20, 2011  •  Case Study  •  464 Words (2 Pages)  •  1,574 Views

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CASH FLOW ANALYSIS FOR THE YEAR ENDED 31 DECEMBER 2010

Operating Activities

As we can see, the net cash from operating activities of Mamee was decreased by RM 29 198 659 from year 2009 to 2001.

Net Income

The company's net income has from decrease year 2009 to 2010 by RM 29 231 772 because the company incurred more expenses even though their sales is higher than previous year. The company incurred higher cost on market expenditure coupled with foreign exchange loss, provision for doubtful debts, tax expense and other operating costs on year 2010.

Collection from Sales

Collection from sales of RM 781 095 in year 2010 was 69.38% lower compared to RM 2 551 253 in year 2009 .This indicates that the company was good in collection of debtors. The company also use discount term to attract their debtors to pay early and it can reduce of delay the payment by their debtors. May be they use the good strategies to ensure their debtors pay the debts on time. For example, they make phone call and send the letter of reminder if their debtors late in making payment.

Payment to Supplier

Payment to suppliers decreased of RM 506 619 in year 2010 was 52.42% lower compared to RM 1064 880 in year 2009. This decrease in account payables indicates that the company are able to pay their supplier more efficient than previous year. The increasing of the revenue and the decrease of account receivables from 2009 to 2010 make them able to pay their payables. The company also use more cash rather than by credit when they want to buy the inventories from their supplier.

Investing Activities

As we can see, Mamee gain positive net cash flow in year 2010 as compared with year 2009. This is because they gain higher proceeds from disposal of available for sale investment for year 2010. The company

Other than that, the company also get higher repayment from its subsidiaries for year 2010 compared with 2009, which is increased by RM 13 421 225. It indicates the subsidiaries earned increasing of their revenue because of the strategies that they use to market the product. The company use attractive advertisement to increase revenue and variety of products that they sell is fulfilling the customer desire.

Financial Activities

The net cash flow from financing activities of the company also increased by........from year 2009 to 2010. The reason of the increasing is because of the higher proceed of issuance share by the company to their investors. The increasing is because of the confidence of the investors toward their company will give them return from the company's profit. Thus, attract them to buy shares at this company.

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