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Derivation of the Statement of Cash Flows from the Cash Flow Identity2
Course: FIN 3310, Spring 2009School: Baylor
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of Derivation the Statement of Cash Flows from the Cash Flow Identity (1) (2) (3) Cash flow from assets = Cash flow to creditors + Cash flow to stockholders Operating cash flow - Net cap. spending - NWC = (Int. paid - Net new borrowing) + (Div. paid - Net new equity raised) (EBIT + Deprec. - Taxes) - Net cap. spending - (End. NWC - Beg. NWC) = [Int. paid - (End. debt - Beg. debt)] + [Div. paid - (End. com. stock -...
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of Derivation the Statement of Cash Flows from the Cash Flow Identity
(1) (2) (3) Cash flow from assets = Cash flow to creditors + Cash flow to stockholders Operating cash flow - Net cap. spending - NWC = (Int. paid - Net new borrowing) + (Div. paid - Net new equity raised) (EBIT + Deprec. - Taxes) - Net cap. spending - (End. NWC - Beg. NWC) = [Int. paid - (End. debt - Beg. debt)] + [Div. paid - (End. com. stock - Beg. com. stock)], where Net cap. spending = End. net fixed assets - (Beg. net fixed assets - Deprec.) (4) EBIT + Deprec. - Taxes - Net cap. spending - [(End. Cash + End. AR + End. Inv. - End AP) - (Beg. Cash + Beg. AR + Beg. Inv. - Beg. AP)] = Int. - paid Debt + Div. paid - Com. stock (5) EBIT + Deprec. - Taxes - Net cap. spending - [(End. Cash - Beg. Cash) + (End. AR - Beg. AR) + (End. Inv. - Beg. Inv) - (End. AP - Beg. AP)] = Int. paid - Debt + Div. paid - Com. stock (6) (7) EBIT + Deprec. - Taxes - Net cap. spending - Cash - AR - Inv. + AP = Int. paid - Debt + Div. paid - Com. stock (EBIT - Int. paid - Taxes) + Deprec. + AP - AR - Inv. - Net cap. spending + Debt + Com. stock - Div. paid = Cash
(8) Net income + Deprec. + AP - AR - Inv. - Net cap. spending + Debt + Com. stock - Div. paid = Cash Cash flow from Operating Activities Cash flow from Investment Activities Cash flow from Financing Activities
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Baylor - FIN - 3310
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Baylor - FIN - 3310
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Baylor - FIN - 3310
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Baylor - FIN - 3310
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Baylor - FIN - 3310
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Baylor - FIN - 3310
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