Ch05 part 2 - Chapter 5 Balance Sheet and Statement of Cash Flows AIM 33310U1 Summer 2009 Xinyi Lu Chapter 5 part 2 1 Part 2 Statement of Cash

Info iconThis preview shows pages 1–7. Sign up to view the full content.

View Full Document Right Arrow Icon
  Chapter 5. part 2 1 Chapter 5: Balance Sheet  and Statement of Cash Flows AIM 3331-0U1 Summer 2009 Xinyi Lu
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  Chapter 5. part 2 2 Part 2: Statement of Cash Flows 1. The usefulness of the statement of cash  flows. 2. The classification of cash flows. 3. The format of the statement of cash flows. 4. The steps in preparation for a statement of  cash flows. * This is just a brief introductory. Detail review is  in Chapter 23. 
Background image of page 2
  Chapter 5. part 2 3 Purpose of  Statement of Cash Flows Primary   purpose:     To provide information about a company’s  cash receipts and cash payments during a  period. Secondary objective: To provide cash-basis information about the  company’s operating, investing, and financing  activities. To report the  sources uses , and  changes   in cash .
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  Chapter 5. part 2 4 Why It Is Important? Cash is the lifeblood of a company. Without cash, a  company will not survive.  Companies can fail even though they report new  income. W.T. Grant -80 -60 -40 -20 0 20 40 60 1 2 3 4 5 6 7 Year Millions of Dollars Income  CFO
Background image of page 4
  Chapter 5. part 2 5 Usefulness of  the Statement of Cash Flows It helps users evaluate liquidity, solvency, and  financial flexibility. Specifically, it provides  information to assess: Entity’s ability to generate future cash flows. Entity’s ability to pay dividends and  obligations. Reasons for difference between net income  and net cash flow from operating activities. Cash and noncash investing and financing  transactions.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
  Chapter 5. part 2 6 Cash and Cash Equivalent The basis recommended by the FASB for the  statement of cash flows is actually “ cash and  cash equivalents .”  Cash : are generally any monies available “on 
Background image of page 6
Image of page 7
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/06/2009 for the course BUSINESS 4444 taught by Professor Dr.dale during the Spring '09 term at University of Texas at Dallas, Richardson.

Page1 / 24

Ch05 part 2 - Chapter 5 Balance Sheet and Statement of Cash Flows AIM 33310U1 Summer 2009 Xinyi Lu Chapter 5 part 2 1 Part 2 Statement of Cash

This preview shows document pages 1 - 7. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online