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Unformatted text preview: 1/9/08 Business Finance Notes The Concept of Cash flow Intro Cash flow is one of the most important pieces of information that a financial manager can derive from financial statements The statement of cash flows does not provide us with the same information that we are looking at here. We will look at how cash is generated from utilizing assets and how it is paid to those that finance the purchase of the assets Calculating Cash flow from Assetts Operating Cash Flow (OCF) is found on the Income Statement OCF(I/S) = Net Sales COGS Taxes OCF= EBIT + Depreciation Taxes CFFA= OCF NWC (Net Working Capital) Spending Spending on FA (Fixed Assets) Spending on FA= Current FA Previous FA NWC spending = (Current total assets Current total liabilities) (Previous total assets previous total liabilities) Slide 1-15 has a summary of all the different formulae Standardized Financial Statements Common-Size Balance Sheets...
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This note was uploaded on 04/07/2008 for the course BA 3341 taught by Professor Polkovnichenko during the Spring '08 term at University of Texas at Dallas, Richardson.
- Spring '08