Session 1Statement of Cash Flows1.Define Statement of Cash Flows?a.Calculated at the same time as the Income Statementb.It equals Income Statement and changes in the balance sheetc.2. Define Cash Flows from Operating, Investing, and Financing Activities3. How does an increase in Accounts receivable impact CFO? Will decrease CFO4. How does an increase in Accounts payable impact CFO? Will increase CFO5.Net Income: 100,000Depreciation: 10,000Change in Operating Assets = 15,000Change in Operating Liabilities = (5,000)PPE (net) on 1/1/15 = 40,000PPE(net) on 12/31/15 = 80,000Change in Long Term Liabilities = 20,000Change in common stock = 15,000Dividends paid = 6,000a. Calculate CFO?b. Calculate CFI?c. Calculate CFF?1 | P a g e
Financial Statements1. A high-quality customer just purchased $500,000 worth of product from your company. Thecontract calls for immediate delivery of the product with a cash payment of $300,000 today and $200,000 to be paid 60 days.The expense associated with the product is $300,000, of which $100,000 has not been paid to your supplier. Under accrual based accounting system, how much revenue and expense will the company report? Rev – 500,000 and Expenses 300,0002. A firm reported retained earnings of $500 in 12/31/20x2. For 12/31/20x3, the firm reports sales of $2,000, margin of 25% and dividend payout ratio of 50%. What is the retained earnings on 12/31/x3? 1253. What financial statement is prepared at a point in time? Balance Sheet 4. What financial statements are prepared for a period of time? Income Statement Time Value of Money1. A stock will be worth $50 at the end of the year and will pay a dividend of $5.How much should an investor pay for the stock if the investor expects a rate of return of 15%?2. An investor paid $45 for a stock today that will pay a dividend of $5 at the end of the year.