Hello,
I have a very basic Cash flow question. Please see the above cash flow statement. 2 questions
- What does a negative “Cash and cash equivalents at the end of period” mean (picture 2 of the above)? If I understand it right, they fell short of cash in the 2 years under consideration above and funded it by using bank overdrafts ? Is that right ?
- Where do Bank overdrafts appear on the Balance Sheet (BS) ? Under current / short term borrowings ? Also, would it exactly tally with the figure on the BS given the indirect method of cash flow calculation is more a end of the year academic exercise and the company would have borrowed from the bank in a staggered manner, as needed, through the year ?
Any insights to the above would be much appreciated, esp by the start accountants on the forum ! 