Azure Mining Company corporate accounting

Document Type:Thesis

Subject Area:Accounting

Document 1

This is shown by the cashflow records where for 2017 the operating, investing and financial activities which (7,022,959), 95,222 and zero respectively. This shows that the company cannot be able to meet its financial obligations because of the deficit. The profit and loss account therefore shows a loss for the past three years making the tax returns to be zero. As such, the analysis of the financial accounts of a firm benefits several stakeholders including the governement. Introduction Financial analysis is an important topic for any company. Other expenses in the cash flows include expenditure on mining interests, payment for plant and equipment, acquisition payments for projects, and share issue costs. These are all expenses that show that cash was flowing out of the company (Harris, 2016).

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Some of the items in the cash flow that represent revenue income include reimbursement of exploration expenditure and proceeds from the sale of the equipment. The cash flow statements indicate various changes in the cash flow statement. The first is a decline in the payments the company made to the suppliers. The investing activities in were (508,029), (1,987,175) and 95,222 in 2015, 2016 and 2017 respectively (Azure company website, n. d). This shows that the activities related to fixed assets are increasing giving positive returns in 2017. The financing activities are the highest contributor to cash flow in the company. The values rose in the three years consecutively. This is mainly because the tax is deducted from the gross profit whereas in this case, the company made a loss.

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For this reason, for the years 2015, 2016 and 2017, the tax expense is left out because a company cannot pay taxes when it is making losses. This value does add up to the total of the tax rate multiplied by the accounting income. This is because in this case, the company registered a negative value in the total income for the year. This is (6,985,541). This is because the former is a current liability which shows the taxes that are due to the government in a year. It is calculated in accordance with the prevailing tax law in a country. The income tax expense, on the other hand, is the liability a firm owes to the governments. Its calculated by using the tax rate of the business and the income before taxes as well as factoring in the non-deductible incomes and tax assets and liabilities (Heider & Ljungqvist, 2015).

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