Case 4 ni direct scf indirect scf purchases cogs

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Case 4: NI Direct SCF Indirect SCF (Purchases ≠ COGS) Sales (collected $80 in cash) 100 Collections 80 COGS ( purchased $65 in cash ) (40) Purchases (65) Depreciation expense (35) NI 25 CFO 15 Illustration of Indirect Statement of Cash Flows
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Case 4: NI Direct SCF Indirect SCF (Purchases ≠ COGS) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS ( purchased $65 in cash ) (40) Purchases (65) ? Depreciation expense (35) Dep'n 35 NI 25 CFO 15 CFO 15 Illustration of Indirect Statement of Cash Flows COGS 40 Cash 80 65
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Case 4: NI Direct SCF Indirect SCF (Purchases ≠ COGS) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS ( purchased $65 in cash ) (40) Purchases (65) Inc. Inv. (25) Depreciation expense (35) Dep'n 35 NI 25 CFO 15 CFO 15 Illustration of Indirect Statement of Cash Flows COGS 40 Cash 80 65 Inventory 65 40
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Case 4: NI Direct SCF Indirect SCF (Purchases ≠ COGS) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS ( purchased $65 in cash ) (40) Purchases (65) Inc. Inv. (25) Depreciation expense (35) Dep'n 35 NI 25 CFO 15 CFO 15 Case 5: NI Direct SCF Indirect SCF (Payment ≠ Purchases) Sales (collected $80 in cash) 100 Collections 80 COGS (purchased $65, (40) Purchases (40) paid $40 in cash ) Depreciation expense (35) NI 25 CFO 40 Illustration of Indirect Statement of Cash Flows
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Case 5: NI Direct SCF Indirect SCF (Payment ≠ Purchases) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS (purchased $65, (40) Purchases (40) Inc. Inv. (25) paid $40 in cash ) ? Depreciation expense (35) Dep'n 35 NI 25 CFO 40 CFO 40 Illustration of Indirect Statement of Cash Flows COGS 40 Inventory 65 40 Cash 80 40
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Case 5: NI Direct SCF Indirect SCF (Payment ≠ Purchases) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS (purchased $65, (40) Purchases (40) Inc. Inv. (25) paid $40 in cash ) ? Depreciation expense (35) Dep'n 35 NI 25 CFO 40 CFO 40 Illustration of Indirect Statement of Cash Flows Accounts Payable 25 COGS 40 Inventory 65 40 Cash 80 40
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Case 4: NI Direct SCF Indirect SCF NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS ( purchased $65 in cash ) (40) Purchases (65) Inc. Inv. (25) Depreciation expense (35) Dep'n 35 NI 25 CFO 15 CFO 15 Case 5: NI Direct SCF Indirect SCF (Payment ≠ Purchases) NI 25 Sales (collected $80 in cash) 100 Collections 80 Inc. A/R (20) COGS (purchased $65, (40) Purchases (40) Inc. Inv. (25) paid $40 in cash ) Inc. A/P 25 Depreciation expense (35) Dep'n 35 NI 25 CFO 40 CFO 40 Illustration of Indirect Statement of Cash Flows
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Cash Flow from Operations = Net Income adjusted for: Addition Deduction Item Depreciation X Decrease in non-cash current assets (inventory, receivables, etc.) X Increase in payables and related short-term liabilities X Losses on asset sales X Increase in non-cash current assets (inventory, receivables, etc.) X Decrease in payables and related short-term liabilities X Gains on asset sales X Statement of Cash Flows: Cash Flows from Operations Δ Cash = NI + Dep’n – Gain (+ Loss) from Sale of LTA – Δ OCA + Δ CL [OPERATING]
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1. Add back non-cash expenses (i.e., Depreciation) 3. Add back decreases in non-cash assets (i.e., prepaid rent expense) 2. Subtract increase in non-cash assets (i.e., Accounts receivable) 4. Add back increase in current (operating) liabilities (i.e. Accounts payable) McDonald’s 10-K Report December 31, 2016
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