TOPIC 4, SCF Flashcards
Provides
an analysis of inflows and/or outflows of
cash from/to operating, investing and
financing activities
STATEMENT OF CASH FLOWS
This helps owners see if their
revenues are actually translated to cash
collections or if they have enough cash
inflows in order to pay any maturing
liabilities.
STATEMENT OF CASH FLOWS
cash flow from operating
activities are primarily derived
from the main revenue-producing
activities of the business.
Operating Activities
Examples of cash flow transactions
reported under operating activities:
a. Cash received from customers
(cash receipts from sale of goods and
rendering of service)
b. cash received from fees,
commissions, and other income
c. cash payments to suppliers
d. cash payments to employees
e. cash payments for other operating
expenses
f. interest payments
reported within this classification are cash
used for acquisition of property, plant and
equipment, intangible assets and other
long-term assets as well as cash proceeds
from the disposals of such long-term
assets.
Investing activities
Investing activities examples:
cash payment to acquire PPE, intangibles and
other long-term assets.
Cash receipts from sale of PPE, and equipment,
intangibles and other long-term assets.
cash loans made to other parties (long-term
note receivable)
cash collection on long-term note receivable.
this section reports cash received
and cash paid to equity owners
and long-term creditors.
Financing activities
Financing activities examples:
cash received from issuing common
shares (or capital contribution from
owners).
cash received from issuing notes or
getting long-term loan from a bank.
Financing activities examples:
cash received from issuing common
shares (or capital contribution from
owners).
cash received from issuing notes or
getting long-term loan from a bank.
cash dividends distributed to
shareholders.
cash withdrawals of owners.
cash payments for principal of
long-term loan.
