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Operating Cash Flows

Operating Cash Flows - Operating Cash Flows We look to the...

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Operating Cash Flows 1 Cash Flow Statement Income Statement Adjustment Cash Flow Account Sales - ∆ A/R = Cash Collected - ∆ A/P + ∆ Inv - ∆ Op Accr - ∆ Dep Interest - ∆ Acc Int = Cash Paid to Creditors - ∆ Accrued Txs - ∆ Deferred Txs Net Profit Operating Cash Flow CGS Operating Expenses Taxes = Cash Paid to Suppliers = Cash Paid for Op Exps = Cash Paid for Taxes We look to the income statement and balance sheet to reconcile changes in cash.
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Relationship Between Accrual Income and Cash Flow Income Statement Adjustment Account Cash Flow Account Sales - Change in accounts receivable = Cash collected Cost of goods sold - Change in accounts payable + Change in inventory = Cash paid to suppliers Operating expenses - Change in operating accruals - Depreciation = Cash paid for operating expenses Interest - Change in accrued interest = Cash paid to creditors Taxes - Change in accrued taxes - Change in deferred taxes = Cash paid for taxes _________________ ___________________ Net Profit Operating Cash Flow
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Converting I/S to Cash Flows 3 Cash Flow Statement Income Statement Adjustment Cash Flow Account Sales - ∆ A/R = Cash Collected - ∆ A/P + ∆ Inv - ∆ Op Accr - ∆ Dep Interest - ∆ Acc Int = Cash Paid to Creditors - ∆ Accrued Txs - ∆ Deferred Txs Net Profit
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