Key Terms Flashcards
COGS
Represents the expenses directly linked to the sale of a good
Appears on IS
What always appears on IS
Revenue, COGS, Operating expenses, depreciation, amortization, stock based compensation, interest, gains or losses, write downs, other income or expenses
What never appears on IS
Capex, purchasing or selling investments and PPE, dividends, issuing or repaying debt principal, issuing or repurchasing shares, changes to BS items such as cash or debt, accounts receivable, accounts payable
Accounts receivable
The company has recorded this as revenue on IS but has not received it in cash yet
Prepaid expense
Company has paid these expenses in cash but has not recorded them as expenses yet on IS
Accounts payable
Company has recorded these as expenses but has not paid them in cash yet - used for one time items with specific invoices
Accrued expenses
The company has recorded these as expenses but has not paid them in cash yet - used for recurring monthly items without invoices such as employee wages
Deferred revenue
The company has collected cash in advance but has not yet delivered the product
What is in cash flow from operations
Accounts receivable, accounts payable etc
Cash flow from investing what appears
Anything related to investments or acqusitions or PPE (capex) - purchases negative sales positive
Cash flow from financing what appears
Items related to debt, dividends, and issuing or repurchasing of shares
In CFS what happens when asset or liability goes up or down
Asset goes up then cash flow down and vice versa
Liability goes up, cash flow goes up and vice versa
