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Cash flow statement

It analysis the movement of the business’ cash, where it reports cash generation and absorption for a period by highlighting the significant components of cash in away that assists users of the financial statements in comparing the cash flow performance of other companies in the same sector. It also provides useful information that assists in the evaluation of companies’ liquidity, solvency and financial adaptability. (AAT, unit 11 published by bpp professional education 2007) Cash flow statement does not provide complete information in assessing future cash flow as it based on historical information.

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It can also be manipulated for example by delaying payments to suppliers and pay them after the year end or by selling part of their assets on purpose to repurchase them. (KAPLAN, 2. 5 financial reporting 06-07) As per the audit opinion the financial statement of cranswick plc has been prepared in accordance with IFRS and it gives a true and fair view of the state of their affairs and profit as at 31st March 2007. (p78 annual report) As per the annual report profit attributable to members was 6665000 compare with i 10160000 in 2006.

The equity dividends declared and paid during the year was a final dividend for 2006 of 4959000, interim dividend for 2007 of  2667000 and declared final dividend of  5607000 for 2007. (P47anual report) Therefore Cranswick plc is has healthy financial position with positive cash flow which gives a fair return to its investors. b)How company provides segmental information and changes upon adoption IFRS8 Under IAS14 listed companies are required to disclose segmental information in accordance to each business segment and geographical region.

The standard also requires that a segment of a company’s operations should be reported separately if its revenue profit or assets are 10% or more of the total. companies primary segment reporting may be based on either business or geographical segment, in primary reporting companies are required to disclose for each segment : revenue operating result operating asset an liabilities, capital expenditure and depreciation of different products and services that accompany provides. (Alexander. D. , Nobes. A. , 3rd Addition. Published 2007. Financial Accenting) Cranswick group’s segment information has been reported in accordance with IAS 14.

Their primary reporting segments contains business segments and its secondary format is reported on geographical segments. The group business segments are food and Pet business and are based on internal management and reporting structure, the both segments exhibit different risks and rates of return. They are no significant transactions between business segments Geographical segment on sales revenue, an analysis of sales by derivation is reported by allotting revenue to the location in which the sale took place, it also geographically analysis the group’s assets and additions to property, plant equipment.

This segment reporting is meant to help the users (e. g. investors) in assessing the past performances and future prospects of the segments interns of their profitability, growth and risk prospect. In 2006, the IASB issued IFRS8 which requires reporting on the basis of the segments reported to the company’s chief operating officer. Under IFRS 8 segment reporting is done in accordance to the management approach. (Alexander. D. , Nobes. A. , 3rd Addition. Published 2007. Financial Accenting)

The adoption of the IFRS 8 by the company may or not have an impact on how they identified their reportable segments, as it depends on how the company applied IAS14 in the past. The group’s segments may require to be identified on the basis of internal reports that are regularly reviewed by the company’s chief operating officer to evaluate and allocate resources of each segment. (http://www. iasplus. com/standard/ifrs08. htm) As per the Cranswick groups’ annual report there will be no impact on their reported Income or net assets when they are to adopt IFRS 8. P42.


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