Module 23.2 The Direct and Indirect Methods

Question 1

Do you exclude depreciation from the direct method for CFOA?

Answer 1

Yes, it is a non cash expense

Question 2

How do you calculate CFIA under the direct and indirect method?

Answer 2

examining the gross asset accounts that result from investment activities scuh as PP&E, intangible assets, and investment securities.

Question 3

how do you calculate CFFA under the direct and indirect method?

Answer 3

net cash from creditors = new borrowings - principal amounts repaid
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net cash flows from shareholders = new equity issued - share repurchases - cash dividends paid