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11.28.12 discussion 1

Revenue payments for employees suppliers interest and

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revenue, payments for employees, suppliers, interest, and merchandise), cash flow from investing (total of purchases or sale of assets, loans made to suppliers and customers, payments for mergers and acquisitions, and dividends received), cash flow from financing (total of proceeds from long and short-term debt, payments of dividends, payments of repurchase of company shares repayment of debt principal, net borrowings, and payment of dividend tax), and net cash flow (totaling the three prior sections). Example Cash Flow Statement 1/1/10 - 12/31/10 Cash flow from operations $10,000 Any of these sections could be a negative number. This could happen if you are paying out more than you are bringing in. Cash flow from investing ($3,000) Cash flow from financing ($2,000) Net cash flow $5,000 Parentheses represent negative numbers The reason I think this section is so important is because it basically gives you an extremely simplified look at all cash transactions. Unlike income statements and balance sheets it doesn’t look at things like land owned or equipment value, it focuses solely on cash going in and cash going out. I look at it as a first stop to look at. After taking a peek at this you can go to the balance sheet to get a more in depth look at all the financial information.
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Works Sited: Wikipedia : Balance sheet, annual report Investopedia: Accounting policy
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