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lec7 - Cash Flow Analysis 15.511 Corporate Accounting...

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1 Cash Flow Analysis 15.511 Corporate Accounting Summer 2004 Professor SP Kothari Sloan School of Management Massachusetts Institute of Technology June 16, 2004
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2 Statement of Cash Flows z Reports operating cash flow as well as other cash flow information. z Provides important information to investors and creditors. z In particular, information about differences in the timing of revenue and expense recognition under GAAP and the associated cash inflows and outflows.
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3 Statement of Cash Flows z The cash flow statement separates changes in cash into three categories: z operating cash flow z investing cash flow z financing cash flow. z The statement sums to the actual change in cash during the year z The actual change refers to the difference between the beginning and ending cash balances reported on the balance sheet.
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