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Notes 15 - Follow the exhibit chart o Direct method Take...

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Statement of Cash Flows Need B/S for 2 years and current year’s I/S Gain on sale of land: o Investing activity Marketable securities: o Either listed under cash or investing o Certificates of Deposit are cash as well To go from B/S and I/S to SCF: o Balance to cash to check if correct o 7 operational items: RE is operating or financing Dividends go to financing NI goes to operating o 2 investing items: For I and F just take net from B/S o 2 financing items: If common stock increases, CF has an inflow If debt increases, CF has an inflow Operational: o Indirect method:
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Unformatted text preview: Follow the exhibit chart o Direct method: Take every single line item (sales, CGS, operating expense, depreciation [leave out], etc.) Convert from accrual to cash *Depreciation: • Put in other expenses first, • Then subtract it out • Sometimes depreciation is recorded as separate expense so just ignore it o Put all this in “good form” o “Common size”: Most useful for seeing exactly where $ is coming from Operations just goes straight in as line item Makes inflows and outflows ratios...
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