The company not able generate the positive operating cash flow
B) BHP, it can be said that they are performing quite well as they have managed to create positive cash flow in their operating activities that emphasize that they are improving. For Santos, it can be said that the business growth can be considered as stable as the company has shown its stability by maintaining the growth rate 26.44% and 29.66% in the year 2018 and 2019 respectively (BHP, 2019). The company can be seen focusing on core business and operational activities. For Funtastic, it can be cash flows are large but still, the company is not able to generate the positive operating cash flow, as there is a huge difference between the cash use and the sources of cash which have made it difficult for the Santos to maintain the stability (BHP, 2019).
C) According to the CFC (cash flow from continuing operations), for BHP the working capital in 2016 (BHP, 2017) was a major source of cash for the operating activities, but in 2017 & 2018 it can be seen that the company was using working capital in the operating investment because the liabilities exceeded their assets. In 3 years, analysis of cash flow operations it can be said that BHP operational activities are much higher than the net income they are generating. The major difference between those figures is because of the following reasons:
The cash flow was negatively adjusted for the account of taxes (annual payments) which have impacted the companies operating activities negatively.
D) it can be seen that BHP Limited, Operational cash flow was much higher than the company indicates that the company is not dependent on the external factor. Whereas for Funtastic Ltd it can be said from the analysis that the company was not able not to generate sufficient cash from the operations, which can be seen from their cash outflow from OCF. For the Santos ltd, it can be said that the company was able to Generate sufficient cash from the operation in 2017, but in 2018 (BHP, 2018) & 2019 it can be seen that they were not able to generate the adequate cash from the operations to pay their capital expenditure.
I) BHP Ltd has slowed down in terms of their new capital expenditure in FY 2017,2018 and 2019 however it can be seen that the company's focus was to pay off their long term debts. In 2018 and 2019 it can be seen that there has been a rise in capital expenditure. For Santos it can be seen that there is no growing operational cash flow, which has also increase the capital expenditure, it can be said that Santos is a growing company where the focus of the company should be on investing in new assets (Santos, 2017). whereas for funtastic Ltd, It can be clearly seen let the companies experiencing slower capital expenditure as the company has recorded the loss as well as their cash flow nigar are shown negatively, this is creating a problem for the company to manage their funds for the further investments.
J) funtastic has not paid any dividend in three consecutive years as the company is going in loss and their operating cash flow is also negative whereas it can be seen that Santo has not paid their dividend in 2017 But the company has managed to pay the dividend in 2018 (Funtastic, 2018) and 2019, that indicates their company is growing in terms of dividend. however, in the case of BHP, it can be said that the company has paid its dividend in all three consecutive years (2017-2019). Hence it can be said that there is a growing trend to payout the dividend.
BHP, 2019. BHP Annual Report 2019. [online] BHP. Available at: <https://www.bhp.com/investor-centre/annual-report-2019/> [Accessed 14 September 2020].
BHP, 2017. 2017 Annual Reporting Suite. [online] BHP. Available at: <https://www.bhp.com/media-and-insights/reports-and-presentations/2017/09/2017-annual-reporting-suite/> [Accessed 14 September 2020].
Santos, 2018. Santos Annual Report 2018. [online] Santos.com. Available at: <https://www.santos.com/wp-content/uploads/2020/02/2018-annual-report.pdf> [Accessed 14 September 2020].
Santos, 2019. [online] Santos.com. Available at: <https://www.santos.com/wp-content/uploads/2020/02/2019-annual-report.pdf> [Accessed 14 September 2020].