Cash flow Analysis of 2008/09 1) Operating cash flow ratio= Cash flow from operating activities Current liabilities

Now, From cash flow statement and balance sheet =9336286898 9276956946 =1.006

Comment and Decision:

a)The above ratio shows that the company is generating enough cash to pay off its short term liabilities.

2) Price cash flow Ratio= Share Price Operating cash flow per share
Here, For calculation of operating cash flows per share, Number of shares= Share capital Price per share = 8,00,00,000 100 =8,00,000 units of shares. Therefore, operating cash flow per share= 9336286898/800000 =Rs 11670.35 Now, From NEPSE (Nepal stock exchange), closing Share price= Rs 738 Hence, Price Cash Flow Ratio= 738/11670.35

= 6.32%

3) Cash flow from operations/Avg total liabilities

Cash flow from Operations/Average total liabilities is a similar ratio to the commonly-used total debt/total assets ratio. Both measure the solvency of a company or its ability to pay its debts and keep its head above water. The former is better, however, as it measures this ability over a period of time rather than at a point in time. This ratio is calculated as follows: Cash flow from Operations/Average Total Liabilities = _______ where: Cash flow from operations is taken from the Statement of Cash Flows and average total liabilities are an average of total liabilities from several time periods of liabilities taken from balance. The higher the ratio, the better the firm's financial flexibility and its ability to pay its debts.

Here,
Avg total liabilities= liabilities of last 3 years 3

=485826324+664827460+9785136137 3 =Rs3645263307 Now, Ratio =9336286898/3645263307 = 2.56

Cash Flow Analysis of 2009/10

1) Operating cash flow ratio= Cash flow from operating activities Current liabilities From cash flow statement and balance sheet =(9229711534) (9255556352) RATIO =0.977 COMMENTS AND DECISION: A) The ratio is insufficient for the company to meet its short term liabilities from its operating cash. B) But since the ratio is very close to "one", the company is not much effected. C) But since this ratio is related to central account only which is to be generalized within the shareholders of the company, hence the company should be a bit serious about to increase the ratio by increasing the operating cash flow.

2) Price cash flow ratio =Share price Operating cash flow per share
Here, For calculation of operating cash flows per share, Number of shares= Share capital Price per share =10,00,00,000/100 =10,00,000 UNITS

Therefore, operating cash flow per share = (9229711534)/1000000 =Rs9229.71 Now, Closing share price from NEPSE=

3) Cash flow from operation/AVG total liabilities Here, cash flow from operation = Rs(9229711534) For average liabilities= liabilities of last three years 3 =485826324+9785136137+555054866 3 =Rs3608672442.33

Hence, RATIO= (9229711534)/3608672442.33 =2.55 COMMENTS AND DECISION A) The ratio show that the company is able to meet its past liabilities and debt with its operating cash. Which is the stable situation of the company also make sense that the company can be operated further.