Statement of Cash Flows Flashcards
Statement of Cash Flows Includes?
Operating Activities
Investing Activities
Financing Activities
What are the types of cash related Operating Activities?
It is cash inflows and outflows from normal operations.
Inflows (cash received)
*From customers
*Dividends (from investments)
*Interest received
*From disposal of trading securities
Outflows (cash paid)
*To suppliers (for goods/services, SG&A, expenses) and employees (payroll)
*Interest paid
*Income taxes
*For the acquisition of trading securities
Cash Flow Operating Activities (Indirect Method)
Net Income
Increase NI:
*Depreciation Expense
*Amortization Expense
*Losses on sale of assets
Decrease NI:
*Equity earnings from Investees
*Amortization of Bond Payable
*Gains on sale of assets
Changes in current assets and current liabilities:
-Increase in current assets
+Decrease in current assets
+Increase in current liabilities
-Decrease in current liabilities
=Cash provided or (used) by Operating Activities
Investing Activities
Cash inflows and outflows relating to investing in self and others.
Inflows:
*Collection of principal payments on loans made by the company
*Disposal of Long-Term Assets (PP&E, intangibles, AFS debt securities and HTM debt securities)
*Proceeds from corporate-owned life insurance policy
*Certificates of Deposit over 1 yr
Outflows:
*Acquisition of Long-Term Assets (PP&E, intangibles, AFS debt securities and HTM debt securities)
*Major repairs (capitalized) for plant or equipment
*Certificates of Deposit over 1 yr
Financing Activities
Cash inflows and outflows from issuing and repaying debt or equity.
Examples:
*Issuance of common or preferred stock
*Treasury stock transactions
*Dividends payments
*Borrowing and repaying debt (principal payments only) bonds payable, notes payable, mortgage payable.