02b CF statement - handout

02b CF statement - handout - Problem Day Today – A review...

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Unformatted text preview: Problem Day Today – A review of the Statement of Cash Flows! What’s important: Net Income or Cash Flow? • Suppose a firm shows a $16,000 increase in the cash position from one year to the next? • Where did the cash come from? • Analyzing all the sources and uses of cash reveals a lot about a firm’s health. Statement of Cash Flows • Cash is King!! • Breaks cash flows into 3 sources: Operations, Financing, and Investing Simplified Income Statement - 2007 Three Dudes, Inc (Assume taxes paid at enterprise level) Revenue $1,400,000 Cost of Services (490,000) Gross Profit $910,000 Operating Expenses (G&A): $280,000 Earnings before interest and taxes (EBIT) $630,000 Interest charges: $27,000 Assets: Liabilities & Owners' Equity: 2003 2002 2003 2002 Cash 32,000 16,000Accts Pay 32,000 28,000 Accts. Rec. 225,000 200,000 Notes Pay 30,000 30,000 Inventories 27,000 29,000Other CL 22,000 22,000 Total CA 284,000 245,000 Total CL 84,000 80,000 PP&E 650,000 560,000 L-T debt 280,000 240,000...
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02b CF statement - handout - Problem Day Today – A review...

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