Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: Both the income statement and the cash flow statement of a company provide useful
information to the user of financial statements. The net profit after tax in the income
statement and the cash from operating activities in the cash flow statement have
basically the same transactions as source, however they still differ, because of timing
differences between the accrual of income and expenses and the cash receipts or
payments thereof, as well as the inclusion of items in the net profit after tax that
rather forms part of cash flow from investment activities.
A growth in turnover usually coincides with an increase in non-cash working capital.
When the company is expanding at too high a rate, too much of his cash resources
are taken up by the increase in non-cash working capital and that could lead to cash
flow problems. This trend can be plotted on a graph, with a growing net profit after tax
and a decline in the cash flow from operating activities. The two lines move away
from each other when there is a significant difference between the net profit after tax
and the cash flow from operating activities.
This study tries to measure the angle between the two lines where they reach the
danger zone. Users of financial statements will be able to use this as an indicator of
companies that are going to be in cash flow trouble over the next period.
In order to measure this angle when the company reaches the danger zone, 365
listed industrial companies were studied. The net profit after tax and the cash flow
from operating activities were both transformed into an index, with cash flow relative
to net profit. The difference between the index strings was calculated. This study only
focuses on companies with an index-difference where the cash flow from operating
activities is smaller than the net profit after tax.
An index-difference of -2 was identified as the possible danger zone. In order to
substantiate this figure, companies with an index-difference of -2 or larger negative
that still were listed at the time of the study were examined to find the reason for the
difference. Items that do not form part of the cash flow from operating activities
cannot be used in the calculation of the index-difference, because it will generate a permanent difference between the net profit after tax and the cash from operating
activities. Companies that have a huge negative index-difference only because of
such items are not in the danger zone.
33 companies with an index-difference of -2 or more negative were identified. Focus
was placed on the thirteen companies that did not have losses and that were still
listed at the time of the study. Six of these companies were removed from the danger
list after the individual examination, because of other reasons for the difference rather
than an increase in non-cash working capital. That leaves seven companies that are
shown by this study to be in danger to get into serious cash flow trouble in the
foreseeable future. A few additional companies were examined which led to another
six companies being placed on the danger list.
Only time will tell whether these companies do get into serious financial difficulty. If
so, the index-difference can be calculated as an indicator of the point when a
company, regardless of a strong growth in turnover, and sometimes because thereof,
does not generate enough cash from operating activities to finance the growth in
non-cash working capital. Unless the company has a holding company that is willing
to pour more cash into the company, or unless the company can do a successful
rights issue, it will find itself in the position where it cannot finance the expansion and
also cannot obtain more additional funding. / AFRIKAANSE OPSOMMING: Beide die inkomstestaat en kontantvloeistaat van 'n maatskappy verskaf nuttige
inligting aan gebruikers van finansiële state. Die netto wins na belasting uit die
inkomstestaat en die kontantvloei uit bedryfsaktiwiteite uit die kontantvloeistaat het
basies dieselfde transaksies as bron, maar verskil tog, hoofsaaklik vanweë tydverskil
in die erkenning van die toevalling van inkomste en uitgawes en die
kontantontvangstes en -betalings daarvan, asook vanweë die insluiting van items in
die netto wins na belasting wat eerder deel vorm van die kontantvloei uit
investeringsaktiwiteite.
Wanneer die maatskappy 'n groei in omset toon, gaan dit gewoonlik gepaard met 'n
toename in nie-kontant bedryfskapitaal. Wanneer die maatskappy te vinnig groei,
word te veel van sy kontantbronne vasgevang in die verhoogde nie-kontant
bedryfskapitaal en dit kan lei tot kontantvloeiprobleme. Hierdie tendens kan op 'n
grafiek uitgebeeld word met 'n stygende netto wins na belasting, terwyl die
kontantvloei uit bedryfsaktiwiteite daal. Wanneer daar 'n aansienlike verskil tussen
die netto wins na belasting en die kontantvloei uit bedryfsaktiwiteite is, beweeg die
twee lyne uit mekaar.
Dié studie poog om die grootte van die hoek tussen die twee lyne wanneer die
gevaarsone bereik word, te bepaal. Dit kan dan deur gebruikers van die finansiële
state as 'n aanduiding gebruik word om te voorspel watter maatskappye oor die
volgende tydperk kontantvloeiprobleme sal hê.
Ten einde die grootte van die hoek te meet waar die maatskappy die gevaarsone
binne beweeg is 365 genoteerde industriële maatskappye se data bestudeer. Die
netto wins na belasting en die kontantvloei uit bedryfsaktiwiteite is beide as 'n indeks
uitgedruk, laasgenoemde relatief tot eersgenoemde. Die verskil tussen die twee
indeks-reekse is bereken, naamlik die indeks-verskil. Die studie is slegs gefokus op
maatskappye met 'n indeks-verskil waar die kontantvloei uit bedryfsaktiwitete kleiner
is as die netto wins na belasting. 'n Indeks-verskil van -2 is geïdentifiseer as die moontlike gevaarsone. Ten einde
hierdie syfer te steun is die maatskappye wat ten tye van die navorsing steeds
genoteer is en 'n indeks-verskil van -2 of groter negatief het, individueel ondersoek
om die rede vir die indeks-verskil vas te stel. Items wat op 'n ander plek in die
kontantvloeistaat as in die bedryfsaktiwiteite hanteer word, kan nie in ag geneem
word in die berekening van die indeks-verskil nie, aangesien dit 'n permanente
afwyking tussen die netto wins na belasting en kontant uit bedryfsaktiwiteite sal
veroorsaak. Maatskappye wat dus bloot as gevolg van sodanige items 'n groot
negatiewe indeks-verskil het, val nie in die gevaarsone nie.
33 maatskappye is geïdentifiseer met 'n indeks-verskilvan -2 of groter negatief. Daar
is gefokus op die dertien maatskappye wat nie verliese gely het nie en steeds ten tye
van die afhandeling van die studie genoteer was. Ses van hierdie maatskappye is
tydens die individuele ondersoek van die gevaarlys gehaal aangesien daar ander
redes vir die groot indeks-verskil was as 'n toename in nie-kontant bedryfskapitaal.
Dit laat dan sewe maatskappye wat deur dié studie aangedui word as om moontlik
finansiële probleme op te tel binne die afsienbare toekoms. 'n Paar addisionele
maatskappye is ondersoek, waarna 'n verdere ses op die gevaarlys geplaas is.
Slegs die tyd sal leer of die betrokke maatskappye wel in 'n finansiële verknorsing
beland. Indien wel, kan hierdie indeks-verskil bereken word en as 'n aanduiding
gebruik word van die punt wanneer 'n maatskappy, in baie gevalle ten spyte van
goeie groei in omset, maar dan ook juis as gevolg daarvan, nie genoeg kontant uit
bedryfsaktiwiteite genereer om die groei in nie-kontant bedryfskapitaal te finansier
nie. Tensy die maatskappy 'n houermaatskappy het wat bereid is om nog kontant te
stort in die maatskappy, of tensy die maatskappy 'n suksesvolle regte-uitgifte kan
maak, vind hy homself in die posisie dat hy nie die uitbreiding kan finansier nie en dat
hy ook nie meer addisionele finansiering kan bekom nie.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/52204 |
| Date | 12 1900 |
| Creators | Steyn, Barbara Wilhelmina |
| Contributors | Hamman, W. D., VdM Smit, E., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | af_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 201 p. |
| Rights | Stellenbosch University |
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