Class 07 Flashcards
cash flow statement
1
Q
what does the CFS tell us and why?
A
shows cash movement since NI is accrual based
2
Q
what is CF from operations?
A
day to day transactions
3
Q
what is CF from investments?
A
fixed assets (long term)
4
Q
what is CF from financing?
A
liabilties + SE
5
Q
what are the CF exceptions?
A
- interest revenue—operating
- interest expense—operating
- dividend revenue—operating
- dividend paid—financing
6
Q
what are 2 types of CFS?
A
- direct—daily cash operations
- indirect—operations + investment + financing
7
Q
how do you do indirect CF?
A
NI + Dep. Exp + L/(G) + (CA) + CL = CFO
8
Q
what should be in CFS disclosures?
A
- cash paid for income taxes
- cash paid for interest
- non cash investing + financing
9
Q
how to check the CFS is correct?
A
the value matches the BS
10
Q
what is CF analysis?
A
- current cash debt ratio = CFO / avg. CL
- cash debt ratio = CFO / avg. TL
- free cash flow = CFO - CapEx - D
11
Q
what is something to note for the exam?
A
confirm the beg + end values in the tables