Cash Flow Statement of Crown Resorts Limited
In this report, proper emphasis had been given on highlighting a problem where a listed organization of the ASX had been selected for the purpose of analysing the Shareholder information as mentioned in the annual report of the business organization. This study deals with analysing cash flow statement of the company (Williams 2014). However, comparative analysis will be done and presented under three sub-sections of cash flow statement and these are cash generated from operating activities, cash generated from investing activities and cash generated from financing activities. The main objective of the study is to analyse these statements present in the annual report as it is needed for carrying out a comparative analysis for a period of 3 years (Beatty and Liao 2014).
The selected company for this report is Crown Resorts Limited as it is based in Australia as well as listed in Australian Stock Exchange. This company contributes hugely to the economic Gross Domestic Product in Australian country (Wild 2015).
Figure: Cash Flow Statement of Crown Resorts Limited
From the annual report of Crown Resorts Limited, it can be understood that the cash flow statement for the company had been prepared by compiling with the direct method. Direct method had been used by the company and this was understood as in the beginning of the cash flow statement, receipts from customers is mentioned. It is known to all that cash flow statement had been further sub-divided into three types of activities and these are operating activities, investing activities and financing activities. To explain each of the activities in detail, it can be seen that investing activities means those activities that have been carried out by the Business Corporatuon in regards to any investment done in various sectors of business (Warren and Jones 2018). In addition to that, financing activities are those activity that have been incurred based on finance related issues that are being carried out by business for the financial year 2017. There are various ietms that have been mentioned in the cash flow statement of the business enterprise and some of these are as follows with proper justification:
Receipts from customers- This means the cash received from the clients
Payments to suppliers as well as employees- This refers to the cash payments that have been made to the suppliers or in that case employees (Barth 2015).
Dividend received- This refers to the cash receipts where it is linked with the dividends that have been received by the Business Corporation.
Comparative Analysis of Cash Flows
Interest received- This refers to the interest that have been receoved through vash by debtoirs of the Business Corporation (Abernathy et al. 2015).
Borrowings costs paid- This refers to the payments and linked with the cost of borrowings where it have been mentioned in the annual report of the business firm under specific head.
Payment of Income tax- This refers to the payment that had been carried out by specific Business Corporation and even recorded under specific head.
Purchase of PPE (Property, Plant and Equipment)- This refers to the proceeeds that are being made from the sale of the PPE and even recorded under given head (Waegenaere, Sansing and Wielhouwer 2015).
Investment in equity accounted associates- This refers to the investments that need to be carried out by the company and even had to record under specific head in assocation with equity accounting.
Proceeds from disposal of investments- This refers to the proceeeds as it had been carried out at the time of disposal of investments as well as recorded under the specific head.
Net proceeds from sale of equity investments- This refers to the net proceeds that had been done from the sale of the investments as it is referred to the equity investments as it is initially purchased by Business Corporation (Trotman, Carson and Gibbins 2015).
Net payment for the acquisition of the controlled entities- This refers to the net payments that are made by the Business enterprise as it is being carried out for the purpose of acquisition of specific business entities and even mentioned in the cash flow statement of the company.
It is important to consider the fact that there are several significant financial components or items that have been mentioned in the cash flow statement of Crown Resorts Limited.
On critical analysis, it can be seen that the cash flow statement of Crown Resorts Limited need to be compared for a period of three years (Scott 2015). From the annual report of the company, it is noted that the company had to be compared for a period of 3 years as well as financial years where it is selected for the purpose and the years are 2015, 2016 and 2017.
The net cash flow from operating activities of Crown Resorts Limited amount to $465663 for 2017, $482682 for 2016 and $634576 for 2015. From the amount, it can be understood that there had been decrease in cash flow from operating activities as the payment of the income tax has been relatively high (Carlon et al. 2015).
Items Reported in Other Comprehensive Income Statement
The net cash flow from investing activities of Crown Resorts Limited amount to $453105 for 2017, ($1045628) for 2016 $2817084 for 2015. There had been decline in the cash flow generated from investing activities. It is because Crown Resorts had arranged for the required financials particulars and there had been constant improvement made in the receipts of the cash for the given financial year 2017.
The net cash flow from financing activities of Crown Resorts Limited amount to ($1955071) for 2017, ($827089) for 2016 and $547794 for 2015. There had been continuous decline in the cash flow from financing activities. For the year 2015, it can be seen that there is an inflow of cash that amounts to $547794. After this financial year, it can be seen that the cash had been flowing out of business for the given financial year 2016 as well as 2017 on the basis of financial activities of the Business Corporation (Schipper, Francis and Weil 2017).
Several items are included in the comprehensive income statement of Crown Resorts Limited and these are listed below with proper justification:
Foreign currency translation- One of the item present in the comprehensive income statement is Foreign currency translation that refers to particular income that have been gained by the specific business entity of Crown Resorts Limited from foreign boundaries as it is based in London (Henderson et al. 2015).
Movement in regard to the cash flow hedge reserve- One of the item that are present in the Comprehensive Income Statement of Crown Resorts Limited is movement because of cash flow hedges. This refers to the movement in regard to cash flow hedges and it is one of the significant elements that are mentioned in the accounting income statement of Crown Resorts Limited (Schaltegger and Burritt 2017).
Unrealized gain- One of the item mentioned in the Comprehensive Income Statement of Crown Resorts Limited is unrealized gain. This refers to the gain that has not been realized as well as specific financial components pertains in the near future as it is being realized as well as mentioned in the income statement under this specific head.
Employee benefit reserve- One of the item mentioned in the Comprehensive Income Statement of Crown Resorts Limited is Employee benefit reserve. This refers to the reserve of the employees that have been presented to them by their employees as parts of the perks as it is being one of the portion of the package of benefits as received by an employee on account of service of employee and terms as Employee Benefit Reserve (Renz and Herman 2016).
Analysis of Items in Other Comprehensive Income Statement
Equity holders of the Parent- This refers to the equity shares or securities that have been mentioned by the company who had been an equity holder and should be mentioned in the income statement under specific head.
Non-controlling interests- This refers to the interests that have been obtained from the acquired companies (Jiang, Wang and Xie 2015).
The above-mentioned financial items are not mentioned in the Profit or Loss Statement of the Business Corporation because P & L Account takes into account main expenditures of business along with the losses as incurred by the firm on account of the operations as carried out by Crown Resorts Limited for the financial year 2017.
Figure: Comprehensive Income Statement of Crown Resorts Limited
Figure: Balance sheet of Crown Resorts Limite
For the year 2017, the income tax that should be paid by Crown Resorts Limited amounts to $118,168. For the year 2016, the income tax that had been paid by the company has been deduced to be $138,720.
In addition to that, it is needed to answer whether the tax has been paid by the Business Corporation based on the tax rate as declared by the Australian Taxation Office. Furthermore, the net profit of Crown Resorts Limited amounts to $1824969 for the financial year 2017. The figure shows that the net profit as incurred by the company will lead to an increase in amount of tax that is much more than the net amount of tax as paid by the Business Corporation. It is for this reason why the company had paid less amount in regard to the tax that is much more than the tax amount that is paid by the Business Corporation. Thus, it is needed to have proper financial disclosures as mentioned in the financial report of the Business Corporation (Reid and Myddelton 2017).
It can be seen that the deferred tax assets are mentioned in the financial statements of the Business Corporation that amounts to $354701. In addition to that, it is seen that deferred tax assets has been disclosed in the accounting reports where the tax asset has been mentioned in the balance sheet of the Business Corporation as it is calculated by including financial elements and these are as follows:
Revaluation of investment to fair value
PPE (Property, Plant and Equipment)
Doubtful debt provision
Losses that are available from offsetting against future taxable income
Other receivables
Treatment of Tax
Prepaid casino tax
The income payment that had been mentioned in the financial statement of the Business Corporation especially in the cash flow statement that amounts to around $107945. However, the income tax expense that had been mentioned in the income statement of the Business Corporation as it amounts to $106815 (Mullinova 2016). There are several difference present between the two amounts and the reason for the difference is because of these components as listed below:
Tax effect of non-deductible depreciation as well as amortization
Difference in foreign tax rates
Shares of the associates
Non-deductible significant items
Deferred tax balances
Revenue losses that have not been brought to account
There are several factors that can be seen interesting by referring to the accounting report of the Business Corporation where the tax structure had been mentioned in the financial report of the company. It can be understood that the specific corporation entity of the company should have been mentioned in the financial report tax structure as it aims at following for the payment of taxes at the same time. Therefore, some of the factor that can be learned from the Business Corporation is that it had to be included in its accounting statements as it give detailed background in relation to tax payment (Macve 2015).
Conclusion
From the above analysis, it can be understood that the accounting statements of Crown Resorts Limited have been prepared by following the prescribed regulations as well as tax structure of the company as it is properly done at the same time. In addition to that, there are sufficient disclosures that have been already mentioned in the accounting statement of Crown Resorts Limited.
Reference List
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