Acme Universal Safezone 9 Limited cash-flow labels conflict with arithmetic

Acme Universal Safezone 9 Limited’s restated cash-flow statement has conflicting operating-cash subtotals for each of the three years ended 31 March. In FY2025, the listed operating profit and working-capital movements imply Rs 15.69 crore before tax, while the statement labels the working-capital movement alone, Rs 1.35 crore, as cash generated from operating activities.

Why do Acme’s cash-flow labels conflict with arithmetic?

Acme’s operating-cash sequence does not reconcile from the subtotal labelled “Cash generated from operating activities” to the post-tax operating-cash figure in FY2026, FY2025 or FY2024. For FY2026, the statement shows negative Rs 10.30 crore under that subtotal, direct taxes paid of Rs 2.78 crore and net cash generated from operating activities of Rs 7.52 crore. The reported post-tax figure instead equals Rs 10.30 crore less Rs 2.78 crore.

The equivalent issue appears in the earlier two periods. Acme reports Rs 1.35 crore as cash generated from operating activities in FY2025 and Rs 15.69 crore as the implied pre-tax amount based on the preceding operating-profit and working-capital lines. In FY2024, the statement labels negative Rs 4.66 crore as cash generated, whereas the calculation from Rs 18.00 crore of operating profit before working-capital changes produces Rs 13.34 crore before Rs 2.46 crore of tax payments.

The supplied restated cash-flow page does not provide a note reconciling the labelled subtotals with net operating cash. The figures show that the FY2026 and FY2024 labelled amounts match the magnitude of net working-capital outflows, while the FY2025 labelled amount matches the net working-capital inflow, rather than the full cash generated before tax.

What do Acme’s FY2026 operating-cash adjustments show?

Acme’s FY2026 detailed lines imply Rs 10.30 crore of operating cash before direct taxes, not a negative amount. The company reports Rs 19.67 crore of operating profit before working-capital changes for the year ended 31 March 2026. This measure includes Rs 9.41 crore of depreciation and amortisation expense, Rs 3.18 crore of finance cost and a Rs 0.40 crore deduction for interest income on bank deposits.

The working-capital lines total a Rs 9.37 crore cash outflow in FY2026. The largest listed outflows were Rs 4.14 crore from other current assets, Rs 3.97 crore from inventories and Rs 0.80 crore from trade receivables; trade payables reduced cash by a further Rs 1.57 crore. Combining Rs 19.67 crore with the Rs 9.37 crore outflow gives Rs 10.30 crore, and deducting Rs 2.78 crore of direct taxes gives the reported Rs 7.52 crore of net operating cash.

This calculation explains the reported FY2026 net operating-cash result but not the negative sign on the preceding subtotal. The restated statement separately records a Rs 12.65 crore purchase of property, plant and equipment and intangible assets within investing cash flow, so that capital expenditure does not form part of the Rs 7.52 crore operating-cash calculation.

Does the same cash-flow issue recur in FY2025 and FY2024?

Acme’s FY2025 numbers indicate that Rs 1.35 crore is the net working-capital inflow, while Rs 15.69 crore is cash generated from operations before tax. Operating profit before working-capital changes was Rs 14.34 crore. The movement comprised outflows of Rs 2.07 crore in trade receivables and Rs 1.79 crore in inventories, offset by Rs 3.03 crore from other non-current liabilities, Rs 0.94 crore from trade payables and other listed movements.

Adding the Rs 1.35 crore working-capital inflow to Rs 14.34 crore gives Rs 15.69 crore before taxes in FY2025. Deducting direct taxes paid of Rs 3.16 crore results in Rs 12.53 crore, which is the net cash generated from operating activities reported by Acme. The stated Rs 1.35 crore subtotal therefore does not itself represent the pre-tax operating-cash figure needed to reach the reported post-tax amount.

FY2024 follows the same pattern, although the printed subtotal is negative. Acme reports Rs 18.00 crore of operating profit before working-capital changes and a Rs 4.66 crore net working-capital outflow, including Rs 3.30 crore from trade payables and Rs 0.97 crore from loans and advances. The resulting Rs 13.34 crore before tax, less Rs 2.46 crore of tax payments, equals the reported Rs 10.88 crore net operating cash.

How did Acme’s operating cash compare with profit and other cash flows?

Acme’s reported net operating cash rose from Rs 10.88 crore in FY2024 to Rs 12.53 crore in FY2025 before declining to Rs 7.52 crore in FY2026. Profit for the year moved differently, falling from Rs 7.56 crore in FY2024 to Rs 0.80 crore in FY2025 and then increasing to Rs 5.86 crore in FY2026. The differences reflect the statement’s adjustments for non-cash items and movements in operating assets and liabilities.

Acme used Rs 12.09 crore in investing activities in FY2026, compared with Rs 18.46 crore in FY2025 and Rs 15.29 crore in FY2024. FY2026 investing cash flow included the Rs 12.65 crore property, plant and equipment purchase, partly offset by Rs 0.34 crore of interest received and Rs 0.28 crore of net sales of fixed assets. The scale of investing outflow exceeded the Rs 7.52 crore reported as FY2026 net operating cash.

Financing activities generated Rs 5.21 crore in FY2026, including Rs 9.98 crore of net short-term borrowing proceeds and a Rs 1.40 crore repayment of long-term borrowings. After operating, investing and financing flows, cash and cash equivalents increased by Rs 0.64 crore to Rs 0.89 crore at 31 March 2026. The balance sheet reports a separate Rs 3.26 crore of cash and bank balances at that date, while the cash-flow statement defines cash and cash equivalents as cash in hand and balances in current accounts.

Conclusion

Acme’s underlying cash-flow arithmetic supports net operating cash of Rs 7.52 crore in FY2026, Rs 12.53 crore in FY2025 and Rs 10.88 crore in FY2024. However, the line labelled “Cash generated from operating activities” instead corresponds to the working-capital movement in FY2025 and to its negative magnitude in FY2026 and FY2024, preventing the subtotal sequence from being read directly.

The next item to watch is whether later financial information corrects the three subtotal labels or adds a reconciliation for the years ended 31 March 2026, 2025 and 2024. The supplied restated statement discloses no plan, correction or explanatory note addressing the difference between the displayed subtotals and the arithmetic needed to reach net operating cash.