Essays on Cash Flow Statement for Dubai Insurance Company Case Study

The paper “ Cash Flow Statement for Dubai Insurance Company” is a   great example of a case study on finance & accounting. Cash Flow Statement forms a vital part of all organization. “ Cash flow statement reports the amount of cash inflow and outflow during a period of time usually an accounting year” . (Heakal, 2009) It helps to find out the change in the cash position. Here we consider activities under three heads. They are investing, operating, and financing. Here it is divided into three to find the change in cash flow from all areas.

“ Operating activities are the day to day activity and the change in cash flow from this activity is accounted for” . (Heakal, 2009) “ Investing activity is the change in cash flow resulting from investment in long term investments” . (Heakal, 2009) “ Financing activity is the change in cash flow due to change in the owners’ equity” . (Heakal, 2009) The company which I have chosen is the Dubai Insurance Company. Now we have a look at the financial statement. The statement of Income for Dubai Insurance Company for the year 2008 is provided for Income Statement for 2008   2008 (AED) 2007(AED) Underwriting Income     Insurance Premium receivable 40,855,420 15,239,855 Movement in provision for unearned income -6,470,199 -3,690,632 Insurance Premium Revenue 34,385,221 11,549,223 Less: Reinsurance Share Premium -13,688,597 -5,559,432 Net insurance premium Revenue 20,696,624 5,989,791 Commission Income 3,585,987 1,856,088   24,282,611 7,845,879 UNDERWRITING EXPENSES     Claims 10,541,594 -646,753 Reinsurers Share of claim -3,631,171 1,940,677 Commission expense 8,119,137 1,280,110 Excess of loss reinsurance premium 177,875 147,188 General expenses 2,008,570 1,001,280   17,216,005 3,722,502 UNDERWRITING INCOME 7,066,606 4,123,377       Investment Income     Realized gain 2,325,435   Fair value gain & losses -416,962 2,343,525 Other Investment Income 2,554,242 5,549,435   4,462,715 7,892,960 Other Income & Expense     General expenses not allocated -657,002 -329,523 Other Expenses -37,799 -3,036   -694,801 -332,559       Profit for the period 10,834,520 11,683,778       Earnings per share 1.08 1.17  

Reference

Arora R K, “accountancy”, 2nd edition, Oxford University Press, India, 2004

Garewal T, Financial analysis, Preparation of financial statement, Chapter 6, page 45-54, Module 1, 2003

Gill &Moira, “Financial Analysis Revisited”, fifty minutes series book, Axzo Press, 2001

Henkel R, “what is cash flow statement”, Investopedia, A Forbes Media Company, 2009