Ch 6 (IFSA) Understanding the Cash Flow Statement

Question 1

Compare and contrast cash flows from operating, investing, and financing activities and classify cash flow items as relating to one of those three categories given a description of the items.

Question 2

Describe how noncash investing and financing activities are reported.

Question 3

Compare and contrast the key differences in cash flow statements prepared under international financial reporting standards (IFRS) and U.S. generally accepted accounting principles (U.S. GAAP).

Question 4

Explain the difference between the direct and indirect method of presenting cash from operating activities and the arguments in favor of each method.

Question 5

Describe how the cash flow statement is linked to the income statement and the balance sheet.

Question 6

Explain the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data.

Question 7

Analyze and interpret a cash flow statement using both total currency amounts and common-size cash flow statements.

Question 8

Explain and compute free cash flow to the firm, free cash flow to equity, and other cash flow ratios.