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Ch.13 Cash Flows - Statement of Cash Flows Chapter 13 Click...

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Click to edit Master subtitle style 12/26/10 Statement of Cash Flows Chapter 13
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12/26/10 Four Major Financial Balance Sheet Income Statement Statement of Stockholder’s Equity Larger statement that incorporates the Statement of Retained Earnings Statement of Cash Flows
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12/26/10 Accrual vs. Cash The income statement and the balance sheet are based upon accrual accounting When revenues are earned and expenses are incurred The statement of cash flows is based on cash-flow accounting When cash is received and paid Cash inflows: when cash is received Cash outflows: when cash is paid The opposite of what we have been doing all
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12/26/10 Statement of Cash Flows With cash being a fundamental measure of a company’s performance, the Statement of Cash Flows shows how the company: Generates cash (Cash Inflows) Uses cash (Cash Outflows)
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12/26/10 Major Firm Activities There are three major types of activities any transaction falls into: Operating Activities Production and sale of goods and services “what the company does as its business” Investing Activities Acquiring and disposing of operating and financial assets Financing Activities Borrowing of money, issuing of stock, paying of dividends
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12/26/10 Operating Activities I NFLOWS Sales to Customers
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