Cash Flow Analysis for Jamuna Oil
Content
Cash Flow Statement
In Millions of BDT except Per Share
12 Months Ending
Cash From Operating Activities
Net Income
+ Depreciation & Amortization
- Increase in Accounts Receivables
- Increase in Inventories
+ Increase in Accounts Payable
- Increase in Accruals
Cash From Operations
Cash From Investing Activities
+ Disposal of Fixed Assets
+ Capital Expenditures
- Increase in Investments
+ Other Investing Activities
Cash From Investing Activities
Cash from Financing Activities
Dividends Paid
+ Change in Short-Term/Long Term
Borrowings
+ Increase in Capital Stocks
+ Decrease in Capital Stocks
+ Other Financing Activities
Cash from Financing Activities
Net Changes in Cash
FY 2010
06/30/201
0
FY 2011
FY 2013
FY 2014
06/30/2011
FY 2012
06/30/201
2
06/30/2013
06/30/2014
564.1
25.4
-364.9
-1,083.8
3,294.9
0.0
1,014.5
26.8
7.0
31.1
1,249.0
0.0
2,079.1
33.5
-348.7
-2,113.9
3,190.6
0.0
1,990.1
46.9
-240.9
-479.7
-1,039.9
0.0
2,316.8
62.3
-201.7
534.4
5,074.6
0.0
2,435.6
2,328.3
2,840.6
276.4
7,786.3
5.2
-35.0
0.0
1.1
-81.0
0.0
0.0
-229.1
-2,667.4
0.0
-175.0
-1,916.0
0.2
-136.7
0.0
0.0
0.0
0.0
-239.8
158.3
-29.8
-79.9
-2,896.6
-2,330.8
21.8
-176.1
-133.4
-183.1
-313.9
-820.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27.8
40.8
-176.1
-133.4
-183.1
-286.1
-780.0
2,229.8
2,115.0
-239.1
-2,340.5
7,028.1
1. Cash Flow Statement Analysis
The statement of cash flows is designed to show how the firms operations have affected its cash
position by examining the operations, investment and financing decisions of the firm. Often the
information contained in the statement of cash flows answer questions like: Is the firm generative
the cash needed to purchase additional fixed assets for growth? Does it have excess cash flows
that can be used to repay debt or to invest in new products? Information contained in the Cash
Flow Statement is useful both for financial managers and investors.
The graph followed shows the net cash in hand of Jamuna Oil Company Limited for the year
2010 to 2014
Net Change in Cash in Million
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2009-10
2010-11
2011-12
2012-13
2013-14
-2,000.0
-4,000.0
Year
Net Change in Cash in
Million
2009-10
2010-11
2011-12
2012-13
2013-14
2,229.8
2,115.0
-239.1
-2,340.5
7,028.1
From the graph it is seen that net change in cash flow went to it’s peak on 2014 whereas in
previous years it was negative (in year 2012 and 2013). Now here our point of analysis would
why the cash balance has gone down in the year 2012 and 2013. This indicates that during that
timeline the firm has more cash outflow than inflow. The cash position of the firm has
deteriorated compared to 2010-11. During the year 2011-12 total increase in investment
increased by BDT 2,667.4 million which continued to increase further in 2013 by BDT 1,916.0
million. Increase in Investment in the fixed deposit is solely responsible for the change in
cashflow position.
Increase in Investment
3000
2500
2000
1500
1000
500
0
2009-10
Year
Increase in
Investment
2010-11
2011-12
200910
0
2012-13
201011
0
201112
2667.4
36
2013-14
201213
1915.9
76
201314
0
Changes in Accounts payable has contributed to the net change in cash. In 2012-13, Accounts
payable was reduced by BDT 1,039.9 Million which contributed to the poor performance of cash
inflow in that year. In the following year 2013-14, Accounts payable has increased by BDT
5,074.6 million which has contribution in better cashflow position.
Increase in Accounts Payable
6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0.0
2009-10
-1,000.0
2010-11
2011-12
2012-13
2013-14
-2,000.0
Year
Increase in Accounts
Payable
2009-10
3,294.9
2010-11
1,249.0
2011-12
3,190.6
2012-13
-1,039.9
2013-14
5,074.6
Huge inventories piled up in
2012 that consumed cash as well as the accounting profit. If we go through the graph of change
in inventory, we will see it was the highest in 2011-12. It is logical due to excessive fluctuations
in the demand of oil for quick power plant projects over that timeline. Later on, inventory level
came down when situation became normal back in 2013-14.
Changes in the inventories also contributed to the net cashflow position.
Increase in Inventories
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0.0
2009-10
2010-11
2011-12
2012-13
2013-14
-500.0
-1,000.0
Year
200910
Increase in Inventories
1,083.8
201011
-31.1
201112
2,113.9
201213
479.7
201314
-534.4
The dividend payment has been quite consistently upward sloping throughout the years. On the
other hand, increase of Net Income has not been upward sloping like the increase in dividend
payment. In the long run, if the growth of dividend payment and the growth of Net Income isn’t
complement each other then Jamuna Oil might face liquidity crisis.
Chart Title
200%
150%
100%
50%
0%
2010-11
2011-12
2012-13
2013-14
-50%
% Increase in Dividend Payment
% Increase in Net Income
Year
% Increase in Dividend
Payment
% Increase in Net Income
2010-11
2011-12
2012-13
2013-14
-24%
37%
71%
161%
23%
9%
24%
11%
In Millions of BDT except Per Share
12 Months Ending
Cash From Operating Activities
Net Income
+ Depreciation & Amortization
- Increase in Accounts Receivables
- Increase in Inventories
+ Increase in Accounts Payable
- Increase in Accruals
Cash From Operations
Cash From Investing Activities
+ Disposal of Fixed Assets
+ Capital Expenditures
- Increase in Investments
+ Other Investing Activities
Cash From Investing Activities
Cash from Financing Activities
Dividends Paid
+ Change in Short-Term/Long Term
Borrowings
+ Increase in Capital Stocks
+ Decrease in Capital Stocks
+ Other Financing Activities
Cash from Financing Activities
Net Changes in Cash
FY 2010
06/30/201
0
FY 2011
FY 2013
FY 2014
06/30/2011
FY 2012
06/30/201
2
06/30/2013
06/30/2014
564.1
25.4
-364.9
-1,083.8
3,294.9
0.0
1,014.5
26.8
7.0
31.1
1,249.0
0.0
2,079.1
33.5
-348.7
-2,113.9
3,190.6
0.0
1,990.1
46.9
-240.9
-479.7
-1,039.9
0.0
2,316.8
62.3
-201.7
534.4
5,074.6
0.0
2,435.6
2,328.3
2,840.6
276.4
7,786.3
5.2
-35.0
0.0
1.1
-81.0
0.0
0.0
-229.1
-2,667.4
0.0
-175.0
-1,916.0
0.2
-136.7
0.0
0.0
0.0
0.0
-239.8
158.3
-29.8
-79.9
-2,896.6
-2,330.8
21.8
-176.1
-133.4
-183.1
-313.9
-820.8
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
27.8
40.8
-176.1
-133.4
-183.1
-286.1
-780.0
2,229.8
2,115.0
-239.1
-2,340.5
7,028.1
1. Cash Flow Statement Analysis
The statement of cash flows is designed to show how the firms operations have affected its cash
position by examining the operations, investment and financing decisions of the firm. Often the
information contained in the statement of cash flows answer questions like: Is the firm generative
the cash needed to purchase additional fixed assets for growth? Does it have excess cash flows
that can be used to repay debt or to invest in new products? Information contained in the Cash
Flow Statement is useful both for financial managers and investors.
The graph followed shows the net cash in hand of Jamuna Oil Company Limited for the year
2010 to 2014
Net Change in Cash in Million
8,000.0
6,000.0
4,000.0
2,000.0
0.0
2009-10
2010-11
2011-12
2012-13
2013-14
-2,000.0
-4,000.0
Year
Net Change in Cash in
Million
2009-10
2010-11
2011-12
2012-13
2013-14
2,229.8
2,115.0
-239.1
-2,340.5
7,028.1
From the graph it is seen that net change in cash flow went to it’s peak on 2014 whereas in
previous years it was negative (in year 2012 and 2013). Now here our point of analysis would
why the cash balance has gone down in the year 2012 and 2013. This indicates that during that
timeline the firm has more cash outflow than inflow. The cash position of the firm has
deteriorated compared to 2010-11. During the year 2011-12 total increase in investment
increased by BDT 2,667.4 million which continued to increase further in 2013 by BDT 1,916.0
million. Increase in Investment in the fixed deposit is solely responsible for the change in
cashflow position.
Increase in Investment
3000
2500
2000
1500
1000
500
0
2009-10
Year
Increase in
Investment
2010-11
2011-12
200910
0
2012-13
201011
0
201112
2667.4
36
2013-14
201213
1915.9
76
201314
0
Changes in Accounts payable has contributed to the net change in cash. In 2012-13, Accounts
payable was reduced by BDT 1,039.9 Million which contributed to the poor performance of cash
inflow in that year. In the following year 2013-14, Accounts payable has increased by BDT
5,074.6 million which has contribution in better cashflow position.
Increase in Accounts Payable
6,000.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
0.0
2009-10
-1,000.0
2010-11
2011-12
2012-13
2013-14
-2,000.0
Year
Increase in Accounts
Payable
2009-10
3,294.9
2010-11
1,249.0
2011-12
3,190.6
2012-13
-1,039.9
2013-14
5,074.6
Huge inventories piled up in
2012 that consumed cash as well as the accounting profit. If we go through the graph of change
in inventory, we will see it was the highest in 2011-12. It is logical due to excessive fluctuations
in the demand of oil for quick power plant projects over that timeline. Later on, inventory level
came down when situation became normal back in 2013-14.
Changes in the inventories also contributed to the net cashflow position.
Increase in Inventories
2,500.0
2,000.0
1,500.0
1,000.0
500.0
0.0
2009-10
2010-11
2011-12
2012-13
2013-14
-500.0
-1,000.0
Year
200910
Increase in Inventories
1,083.8
201011
-31.1
201112
2,113.9
201213
479.7
201314
-534.4
The dividend payment has been quite consistently upward sloping throughout the years. On the
other hand, increase of Net Income has not been upward sloping like the increase in dividend
payment. In the long run, if the growth of dividend payment and the growth of Net Income isn’t
complement each other then Jamuna Oil might face liquidity crisis.
Chart Title
200%
150%
100%
50%
0%
2010-11
2011-12
2012-13
2013-14
-50%
% Increase in Dividend Payment
% Increase in Net Income
Year
% Increase in Dividend
Payment
% Increase in Net Income
2010-11
2011-12
2012-13
2013-14
-24%
37%
71%
161%
23%
9%
24%
11%
