KIC000086 - generated . (;h.p.12 • • Financing Section...

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Operating Section Wl:---. . CI=o s-Adjusrs net income to a cash basis s-May be direct or indirect '* .s-Dlrecr adjusts each line of income statement to cash basis ~ Indirect adjusts net income to cash basis by looking at what affected income that did not affect cash (most popular method) rJ]o. -c: 4 C,,",p.12 Cash Flow Effect of Changes in Accounts Indirect Method Adjustments to Net Income: + Depreciation and Amortization Expense +/- Changes in Account Balances Investing Section s-Shows cash flows from buying and selling noncurrent assets including ...property plant and equipment (capital expenditure) * investments :;;'Compared to cash from operations to see how much of investment funds are internally
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Unformatted text preview: generated . (;h.p.12 • • Financing Section ~ \~ ~(CM1 pilctj OPU-I.bi~ s-Shows cash flows from issuing and maintaining debt, issuing and repurchasing stock (our own) and paying dividends. »-Financing has to provide the bridge between the amount used in investing activities and the amount generated by operations Ratio Analysis Quality of Income = Cash from Operations Net Income Capital Acquisition-Ca'ih from Operations 8J:. (0) Capital Expenditures &f (;Q 8 Ratio Analysis cont. ""fIE 's-Cash Coverage Ratio Cash from Operations + Interest Paid + Taxes Paid Interest Paid c.... p.ll 9 Chlp_ II Scf .[5...
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This note was uploaded on 09/01/2011 for the course ACCT 284 taught by Professor Clem during the Fall '08 term at Iowa State.

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KIC000086 - generated . (;h.p.12 • • Financing Section...

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