Ch.13 Cash Flows

Ch.13 Cash Flows - Click to edit Master subtitle style...

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Unformatted text preview: Click to edit Master subtitle style 12/26/10 Statement of Cash Flows Chapter 13 12/26/10 Four Major Financial Balance Sheet Income Statement Statement of Stockholders Equity Larger statement that incorporates the Statement of Retained Earnings Statement of Cash Flows 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 12/26/10 Statement of Cash Flows With cash being a fundamental measure of a companys performance, the Statement of Cash Flows shows how the company: Generates cash (Cash Inflows) Uses cash (Cash Outflows) 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 12/26/10 Operating Activities I NFLOWS Sales to Customers Interest Received Dividends Received OUTFLOWS Purchase of goods/services Payment of any expense Payment of interest...
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Ch.13 Cash Flows - Click to edit Master subtitle style...

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