This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: Chapter 5 Statement of Cash Flows – a financial statement that shows the amount of cash collected and paid out by a firm over an accounting period for operating activities, investing activities, and financing activities Cash Flows from Operating Activities Cash Flows from Investing Activities- see yellow chapter 5 handout Cash Flows from Financing Activities Preparing the statement of Cash Flows:- Indirect Method: a method of calculating cash flows from operating activities in which net income is adjusted for items that do not affect cash flows- Direct Method: a method of determining cash flows from operating activities in which each item on the income statement is converted from an accrual basis to a cash basis * The direct method is not as common as the indirect method. * See Yellow Handout Cash Debt Coverage Ratio – measures a firm’s ability to repay both its short-term and long-term debt Cash Dividend Coverage Ratio – measures the ability of a firm to pay dividends at the current...
View Full Document
This note was uploaded on 03/29/2008 for the course ACC 310 taught by Professor Thomas during the Spring '08 term at N.C. State.
- Spring '08