Lecture 7 Statement of Cash Flow 1

Lecture 7 Statement of Cash Flow 1 - Statement of Cash...

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Unformatted text preview: Statement of Cash Flows (I) Understand the difference between direct and indirect cash flow statements. Understand the logic and intuition of an indirect cash flow statement. Understand adjustments to income that are required to derive cash from operations. Statement of cash flows -- ABC Corp. First-year Direct Cash Flow Statement Operating Activities Collection from customer 40 Payment to vendors (60) Interest received 10 Net cash from Operation (10) Investing Activities Purchase of building (200) Financing Activities Proceed from sale of stock 1000 Cash dividends (20) Change in cash 770 First-year ( Indirect) Cash Flow Statement Operating Activities Net income 40 Depreciation expense 10 Net (increase) decrease in receivables (20) Net (increase) decrease in inventory (80) Net increase (decrease) in payables 40 Net cash from operation (10) Investing Activities Purchase of building (200) Financing Activities Proceed from sale of stock 1000 Cash dividends (20) Change in cash 770 Statement of Cash Flows (SCF) Operating activities Cash inflows and outflows related to developing, producing, and selling products and/or providing services. cash provided by the sale of goods or services (including cash received from interest and dividends received) cash used to pay operating expenses (including interest payment) Investing activities Cash inflows and outflows from acquiring and selling long-term assets, acquiring and selling investment securities, lending money and collecting loans. Financing activities Cash inflows and outflows related to equity and debt....
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This note was uploaded on 04/11/2009 for the course ACCT 410x taught by Professor Bonner during the Fall '06 term at USC.

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Lecture 7 Statement of Cash Flow 1 - Statement of Cash...

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