Cash Flow Statement

Question 1

What is the net cash flow made up of

Answer 1

• Operations cash flow
• Investing cash flow
• Financing cash flow

Question 2

What does cash flow from operations come from

Answer 2

includes transactions from all operational business activities

Question 3

What does cash flow from investments come from

Answer 3

result of investment gains and losses

Question 4

What does cash flow from financing come from

Answer 4

Overview of cash from debt and equity

Question 5

What is the difference between accrual and cash accounting

Answer 5

Accrual accounting measures a company’s position regardless of when cash transactions

Cash accounting only records transactions when payment occurs

Question 6

Give a dumdum way to explain cash flow from operations

Answer 6

It is the company’s net income but in a cash version.

Question 7

Name some outflows that may be generated in cash flow from operations

Answer 7

• Buying and selling inventory and supplies
• Wages of the employees

Doesn’t include outflows from investments and debt as it only relates to core business activities

Question 8

What kind of accounting does the cash flow statement use

Answer 8

Cash - so only accounts for cash on hand

Question 9

What is the relation between cash flow and accounts receivable

Answer 9

Cash flow deducts the accounts receivable from the net income as it isn’t a cash value.

Question 10

What other things can the cash flow from operations include

Answer 10

• Accounts payable
• Depreciation
• Amortisation
• Numerous prepaid items booked as revenue or expenses

Question 11

What things does cash flows from investment include

Answer 11

Investment gains and losses:

- cash spent on property and equipment

Question 12

What part of the cash flow statement is where you look for capital expenditures (capex)

Answer 12

Cash flows from investing

Question 13

What is capital expenditures

Answer 13

Funds used by a company to acquire, upgrade and maintain physical assets like property, plants, buildings, tech or equipment

Question 14

How can capex relate to cash flow and what does this mean

Answer 14

When capex increases it usually means a reduction in cash flow

This may not be a bad thing as it may mean there are investments into the company’s future operations

Question 15

AY BAWS CAN I HABE DE NOTE PLZ

Answer 15

Doesn’t need to be +ve cash flow from investments customers you’d prefer cash flow to be from business operations

Question 16

What does the cash flows from financing include

Answer 16

Cash flow between a company and its owners and its creditors - and its source is normally from debt or equity

Question 17

How do investors use the cash flows from financing

Answer 17

Tells you how much the company’s paid out via dividends or share buybacks

Also helps to determine how a company raises cash for operational growth

Question 18

What does it mean when cash flows from financing are +ve

Answer 18

More money coming into the company than flowing out

Question 19

What does it mean when cash flows from financing are -ve

Answer 19

Means the company is paying off debt, or is making dividend payments and/or stock buybacks