CH-13 PPT - Slide 13-1 Chapter 13 Statement of Statement of...

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Unformatted text preview: Slide 13-1 Chapter 13 Statement of Statement of Cash Flows Cash Flows Financial Accounting, Seventh Edition Slide 13-2 Usefulness Usefulness Classifications Classifications Significant noncash Significant noncash activities activities Format Format Preparation Preparation Indirect and direct Indirect and direct methods methods Step 1: Operating Step 1: Operating activities activities Step 2: Investing and Step 2: Investing and financing activities financing activities Step 3: Net change Step 3: Net change in cash in cash Free cash flow Free cash flow The Statement of The Statement of Cash Flows: Cash Flows: Usefulness and Usefulness and Format Format The Statement of The Statement of Cash Flows: Cash Flows: Usefulness and Usefulness and Format Format Preparing the Preparing the Statement of Cash Statement of Cash Flows—Indirect Flows—Indirect Method Method Preparing the Preparing the Statement of Cash Statement of Cash Flows—Indirect Flows—Indirect Method Method Using Cash Flows to Using Cash Flows to Evaluate a Company Evaluate a Company Using Cash Flows to Using Cash Flows to Evaluate a Company Evaluate a Company Statement of Cash Flows Statement of Cash Flows Statement of Cash Flows Statement of Cash Flows Slide 13-3 SO 1 Indicate the usefulness of the statement of cash flows. Provides information to help assess: 1. Entity’s ability to generate future cash flows. 2. Entity’s ability to pay dividends and obligations. 3. Reasons for difference between net income and net cash provided (used) by operating activities. 4. Cash investing and financing transactions during the period. Usefulness and Format Usefulness and Format Usefulness and Format Usefulness and Format Usefulness of the Statement of Cash Flows Slide 13-4 SO 2 Distinguish among operating, investing, and financing activities. Income Statement Items Operating Activities Generally Long-Term Asset Items Investing Activities Generally Long-Term Liability and Equity Items Financing Activities Classification of Cash Flows Usefulness and Format Usefulness and Format Usefulness and Format Usefulness and Format Slide 13-5 Types of Cash Inflows and Outflows Classification of Cash Flows Classification of Cash Flows Classification of Cash Flows Classification of Cash Flows SO 2 Distinguish among operating, investing, and financing activities. Operating activities —Income statement items Cash inflows: From sale of goods or services. From interest received and dividends received. Cash outflows: To suppliers for inventory. To employees for services. To government for taxes. To lenders for interest. To others for expenses....
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This note was uploaded on 11/05/2011 for the course BMGT 220 taught by Professor Bulmash during the Spring '08 term at Maryland.

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CH-13 PPT - Slide 13-1 Chapter 13 Statement of Statement of...

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