I have been reviewing an earlier spreadsheet I prepared looking at Bioventix (BVXP). In my spreadsheet I have the following cash flow from operations-type figures. Firstly, Cash from operations (before tax) and secondly Net cash from operations, that is after tax. I've found that in a lot of the companies that I have researched their accountant tends to calculate both of these figures, and hence moving them into my spreadsheet is just a Copy and Paste. However the BVXP ones are laid out a slightly differently (see their AR2018 accounts), where on page 20, the reader is presented with the "Net cash from Ops" as fairly obvious value (5,922,097 for 2018 and 3,956,937 for 2017), but no obvious "before tax" Cash from Ops figure.
So I decided to just "figure it out for myself" by reading the entirety of the CF breakdown and adding back the tax figure. However, this give somewhat of a dilemma since there are two different values, labelled as germane to tax. Looking at just the 2018 figures:
Taxation charge 1,203,351
Corporation tax (paid) (566,356)
Now that I have read further into the AR and done some analysis + head scratching, I now believe that it is the value labelled Corporation tax (paid) which is the actual value of the cash paid out for 2018, and hence it's that figure which one must add back in order to convert Net CFO back to Gross CFO (i.e. 5,922,097 + 566,356 = 6488453). Here is the analysis I did, if anyone wants to chip and correct me, or comment on my thought process, then go ahead.
The first thing I did was to review the Note 11. on taxation (pages 30-31), this is my annotated brief of it. I've included an extra column to cover any areas on which I'm not 100% sure.
So I conclude the value £1203351 (£849551: 2017) is just what BVXP's accountant calculated, not what they actually paid out. Note these figures do appear in the P&L statement (page 16):
Then I looked at the Cash flow statement on page 20, and again proceeded with some notes and annotation:
So based on my new "understanding" I believe that to derive the before tax CFO figure from the net one, I just need to add back the "tax paid" not the "tax charge" figure, i.e.
So do people agree/disagree with my thought process? All comments welcome. My conclusion is that there is quite a difference between profit and cash flow. It makes the concept of "profit" seem almost abstract in my opinion.
thanks Matt