Cash Flow Statement
Most of the Cash Flow Statement is derived from the Income
Statement and the changes in the Balance Sheet.
SBIT (surplus before interest and taxation) and depreciation
are self explanatory. Capitalised repairs and maintenance are
shown here rather than as a part of capital expenditure.
Other non-cash items are taken from surplus on disposal of
fixed assets on the income statement.
Other income is not modelled.
The change in net working assets is taken from the balance
sheet changes in debtors and other current assets less creditors and other current
liabilities.
Interest received is assumed to be the same as on the Income
Statement but interest paid is adjusted for any capitalised/accrued
interest in the input assumptions.
Tax paid is assumed to be the same as tax charged. Any current
tax liability (or asset) arising from the timing difference is included in creditors
and other current liabilities on the balance sheet.
Most of the items under the capital expenditure heading are
calculated from the inputs on unit cost/prices and changes in unit numbers during
the year, the SHG assumptions and other fixed asset expenditure. In fact, all
the factors driving the balance sheet figures for fixed assets and total capital
grants are relevant here except the non-cash items of revaluation and free land
at fair value.
Home buy Grant/Loan Surplus/(Deficit) is derived directly from two
user inputs, namely average revenue deficit/surplus per loan granted and number
of loans granted each year.
Other financial purchases/sales are taken from the balance
sheet changes in financial investments which are likely to be zero in the main.
Loan repayments are taken direct from the user input of scheduled loan
repayments. Increase in medium and long-term debt is a composite
of user's inputs for scheduled repayments and new loans plus the funding deficit
or surplus generated by the model to balance the cash flow.
Changes in short-term debt and changes in cash are taken direct
from balance sheet changes except that surplus cash generated will increase
cash balances once all debt is repaid.
The other/dividends and changes in equity row is not
programmed.
The sundry balance sheet items such as pension assets and provisions that are
assumed to remain constant obviously have no cash flow impact.