UNIQ : Statement of Cash flows analysis
Unique engineering and construction pcl (UNIQ)
The Company provides engineering and construction services of the fundamental infrastructure which focuses mainly on medium and large infrastructure projects and the company is in the Property & Construction section where many firms are in this section and the firm ranking is No.4 in Thailand So the company seems like an interested company in this section.
In part of the statement of Cash flows, there are 3 main activities that seem like the general companies which contain 1. Operating Activity, 2. Investing Activity, 3. Financing Activity. The Cash flows activities of the company can show a statement of cash status that cannot generate positive cash flow from its business operations or a negative overall cash flow is not necessarily a bad thing for business. The cash flow analysis will focus in part on a separate financial statement between the period year 2017–2021(Quarter 3).
Refer to the figure 1 that will be shown the overall image of statement cash flows activities, In the years 2020 and 2021(Quarter 3) are very huge cash flows if it is compared with another year and the financing activities look like the main activity of the company because the financing activity is most of the area in each year then that will be bigger than operating activity.
Refer to figure 2 that will be shown about the overall & trending of the net cash and equivalent. The Net cash and equivalent will be unstable value on the positive and negative sides but referring to the details between the years 2017–2021(Quarter 3), We can imagine the trend of net cash that will be an uptrend but that depends on the situation in the future.
1.Operating activity
Operating activity that is cash effects of the business transaction which create the revenue & expense of the company. Refer to figure 3 that will be shown the net operating activities of the company. For years 2017–2021, the net operating is a negative value that appears to imply the operating expense is more than generating revenue. After we deep evaluate in operating detail, The main operating activities there are 4 activities instead 1. Inventory,2. Advance payment to subsidiary, 3. Unbilled trade receivable, 4. Trade and other current and note payables(A/P) So these are matched with the company business model because the company provides engineering and construction services of the fundamental infrastructure which the cost will relate with the activities.
Refer to table 1 that will show the main activities, the advance payment to subsidiaries is almost a huge negative per year except for the year 2019 is a positive value. In part of the inventory year, 2017–2019 are the negative value that implied show the inventory is accrual status but in the year 2020–2021 Quarter 3 is positive that is shown the company can sell the inventory and can generate revenue, The Trade and current and note payable (A/P) in the year 2020,2021 is positive that show the company paid cash to payable that is the good sight for the company because the company uses the operating revenue to pay to the operating expense by the way in part of A/R the company there are negative on many years that will implied shown ability to receive cash from customer is not good.
Refer to Figure 4 that shows the detail about inflow and Outflow cash comparison. The result seems like a downtrend of both. On the other hand if the outflow cash reduces more than inflow cash that is a good sight for the company which has probability for positive operating cash.
Refer to Figure 5 that shows the detail about Trend of net operating activities. The result seems like an uptrend that is related with the inflow and outflow cash due the outflow cash is downtrend more than inflow that will affect the net operating activity to be good sight.
2.Investing Activity
Investing activity is a crucial component of a company’s cash flow statement which reports the cash that’s earned and spent over a contained period.
Refer to Figure 6 that shows the details about net investing activities and main activities. As a deep evaluation we found the main investing activities. There are 2 activities 1.Purchasing fixed assets, 2. Increase in investments in restricted deposits at financial institutions. In general investing should be negative so that the company has a chance to get the profit in the future. Refer data in 2020 is a huge investing activity on part of purchasing fixed assets so that is very different from others. As data, the company invests in the main activity is purchasing fixed assets.
3.Financing Activity
Refer to Figure 7 that shows the details about net Financing activities and financing cost As deep evaluation we found the main investing activities. There are 3 activities for example 1.Bank and short term borrowing, 2.Issuance of debenture, 3.Long Term borrowing.
In year 2020 the company have Bank and short term borrowing is too high because if we refer Figure 6 in year 2020, the company invest in fixed asset to much so the company need to borrow the bank to cover the investment cost that is reasonable then if we see the detail about financing cost the trend is uptrend and increase every year the relate directly on the bank and short term borrowing cost. The main financing activities are bank short term borrowing and Issuance of debenture which are main activities to cover the overall cost of this company.
Cash Flow ratio
Cash flow to net income ratio is the ratio of net operating per net income to the above that shows the negative value that will show the net operating expense more than income and the ratio more than 1:1, that indicates the company is in deficit budget between expenses and net income.
Cash flow adequacy ratio can measure the company’s ability to finance its capital expansion through cash from operations. In this case the net operating is negative and almost estimated to be less than 1 except in 2019 (Cost of inventory is too high). That shows the operating company can not generate revenue sufficient cash flow to maintain itself so the company acquires additional debt or equity funding by the way In this case the cash flow adequacy ratio is uncountable.
Cash flow perspective (My perspective)
Regarding cash flow analysis of the Unique engineering and construction public company limited(UNIQ), In part of Operating activity there is always negative value that is shown in the generating revenue ability of the company which is bad. The net cash and equivalent which are positive on some periods that come from financing activity because the company has income from financing activity too much to cover the operating & investing activity. Referring to statement cash flow, the company is not interesting for investment.
Using Google data studio for supporting analysis that is very useful tool and can help you to explore some details as you never know before 😂
refer Link as below
https://datastudio.google.com/s/t9IXSbgZdeI
