FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS. A. Understand the basic structure and format of the statement of cash flows.

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS. A. Understand the basic structure and format of the statement of cash flows."

Transcription

1 FINANCIAL ACCOUNTING WEEK 12 STATEMENT OF CASH FLOWS I. LEARNING OBJECTIVES - STATEMENT OF CASH FLOWS A. Understand the basic structure and format of the statement of cash flows. B. Distinguish cash flows from operating, investing, and financing activities. C. Explain how the statement of cash flows complements the other financial statements and how it can be used by those interested in the financial condition of a company. D. Identify the important investing and financing transactions that do not appear on the statement of cash flows, and describe how they are reported. E. Understand the economic consequences associated with the statement of cash flows. II. Purpose of Statement of Cash Flows A. To explain the change in the cash balance during the accounting period associated with operating, investing, and financing activities. For purposes of the statement of cash flows, cash can be defined as: 1. Cash only. That is, coin, currency, money orders, certified checks, cashiers' checks, personal checks, bank drafts, and so forth. 2. Cash plus cash equivalents. Cash equivalents are usually defined as investments, such as commercial paper, that have maturities of less than three months or original maturities of three months or less. B. To provide information about the cash flows during the period associated with operating activities, investing activities, and financing activities. C. Lawson III. Overview of the Statement of Cash Flows A. The change in cash can be explained by summarizing the cash flows from: 1. Operations a. Operating activities are associated with 1

2 acquiring and selling inventories and services. That is, those activities that are part of the company's ongoing central activities. b. In general, items included in the operating section of the income statement are considered to be operating activities. c. Interest Income and Expense and Taxes must be separately disclosed, somehow. 2. Investing activities are associated with the purchasing and selling of nonoperating (noncurrent) assets. Investing activities include purchasing or selling long-lived assets, long-term investments, and intangible assets. 3. Financing activities are associated with cash flows from nonoperating debt and stockholders' equity. Financing activities include issuing or selling long-term debt or shares of stock, retiring longterm debt, repurchasing shares of stock, and paying cash dividends. 4. E14-2; P14-2; P14-5. B. Methods of presenting the statement of cash flows. 1. Direct method a. Cash flows and inflows from operating activities can be traced directly to the cash account in the general ledger. The actual cash inflow and outflow associated with each income statement item is disclosed on the face of the statement of cash flows. b. Accrual income statement amounts are reported in the body of the statement of cash flows at their cash amounts. That is, the actual cash inflows and cash outflows from individual operating activities are reported on the face of the statement of cash flows. c. A schedule that reconciles net income to net cash flow from operating activities must accompany the statement of cash flows. d. Examples (1) Text - pp. 642/660 (2) AST, if available. 2

3 e. E Indirect method a. Cash flows from operating activities are computed indirectly by adjusting net income. b. Net income is adjusted from an accrual amount to net cash flow from operating activities on the face of the statement of cash flows. Accrual net income is adjusted for: (1) Noncash charges to noncurrent accounts, like depreciation expense. (2) Changes in current accounts other than cash, like an increase or decrease in accounts receivables. c. Text - p. 643/661 d. Examples (1) Text - pp. 645, 758. (2) Lawson (3) AAA e. Under both methods: (1) The dollar amount reported for net cash flow from operating activities is identical under the direct and indirect methods. (2) The presentation of the investing activities and financing activities is identical under the direct and indirect methods. (3) Text - p. 642 & 660. f. ID7-8. IV. Relation of statement of cash flows to other financial statements. (p. 53) A. To the Income Statement 1. The operating section of the statement of cash flows and the income statement both provide a measure of the company's operating performance. 3

4 2. The income statement measures operating performance on an accrual basis while the operating activities section of the cash flow statement measures operating performance on a cash basis. B. To the Balance Sheet 1. The statement of cash flows and the balance sheet both provide information about a company's operating, investing, and financing activities. 2. The information reported in the balance sheet is based on accrual accounting while the information reported in the operating, investing, and financing sections of the cash flow statement is based upon cash inflows and outflows. V. Using the statement of cash flows. A. Assessing a company's ability to generate cash. The ability to generate cash is a function of: 1. The strength of a company's operating activities. 2. A company's capacity to borrow, issue equity, and sell nonoperating assets - the company's financial flexibility. B. Assessing a company's effectiveness at managing its cash. Effective cash management entails: 1. Maintaining solvency 2. Making idle cash productive. C. Disclosing cash usage D. Homework 1. ID ID2-1. VI. Economic consequences of the statement of cash flows. A. Importance of cash flow statements in assessing potential investments. B. Incentives to window dress the statement of cash flows. C. Ease of manipulating cash flows. D. Reasons not to manipulate cash flows. 4

5 VII. Operating, investing, or financing activities not involving cash flows. See page 648. A. Because the statement of cash flows reports only on cash inflows and outflows, significant operating, investing, or financing activities that do not involve cash flows are not reported in the body of the statement of cash flows. For example, Acme Corp. buys a plant with $0 cash and $10 million note payable. How does it show up on the Statement of Cash Flows? B. Significant noncash investing and financing activities should be described clearly in the footnotes to the financial statements or in a supplemental schedule to the statement of cash flows. C. Significant noncash operating activities can be determined by analyzing the adjustments reconciling net income and net cash flow from operations. VIII. Looking at the statement with an international perspective A. The statement of cash flows is now required under IFRS. Also, terminology may be different, the information is the same. (See ID14-7.) B. The reporting of foreign currency gains and losses are being disclosed on the statement of cash flow even though no cash flow is involved. C. Example - Lawson 5

6 IX. Analysis A. p Operating Investing Financing These eight outcomes are all of the possible outcomes on the Statement of Cash Flows. Each outcome conveys a separate message about a firm's cash flow for the period in question. B. Homework: ID2-4. C. Homework: ID2-5; ID5-15. X. Review of Learning Objectives - Statement of Cash Flows 6

Chapter 6 Statement of Cash Flows

Chapter 6 Statement of Cash Flows Chapter 6 Statement of Cash Flows The Statement of Cash Flows describes the cash inflows and outflows for the firm based upon three categories of activities. Operating Activities: Generally include transactions

More information

CHAPTER 14 THE STATEMENT OF CASH FLOWS

CHAPTER 14 THE STATEMENT OF CASH FLOWS E14 1 CHAPTER 14 THE STATEMENT OF CASH FLOWS 1. Investing activity 2. Financing activity 3. Operating activity 4. Financing activity 5. Investing activity 6. Investing activity (for the cash paid for the

More information

Cash is King. cash flow is less likely to be affected

Cash is King. cash flow is less likely to be affected Reading 27: Understanding Cash Flow Statements Relevance of Cash Flow The primary purpose of the statement of cash flows (SCF) is to provide: Info about a firm s cash receipts & cash payments during an

More information

Understanding Cash Flow Statements

Understanding Cash Flow Statements Understanding Cash Flow Statements 2014 Level I Financial Reporting and Analysis IFT Notes for the CFA exam Contents 1. Introduction... 3 2. Components and Format of the Cash Flow Statement... 3 3. The

More information

COMPONENTS OF THE STATEMENT OF CASH FLOWS

COMPONENTS OF THE STATEMENT OF CASH FLOWS ILLUSTRATION 24-1 OPERATING, INVESTING, AND FINANCING ACTIVITIES COMPONENTS OF THE STATEMENT OF CASH FLOWS CASH FLOWS FROM OPERATING ACTIVITIES + Sales and Service Revenue Received Cost of Sales Paid Selling

More information

The Statement of Cash Flows

The Statement of Cash Flows CHAPTER The Statement of Cash Flows OBJECTIVES After careful study of this chapter, you will be able to: 1. Define operating, investing, and financing activities. 2. Know the categories of inflows and

More information

Consolidated Balance Sheets

Consolidated Balance Sheets Consolidated Balance Sheets March 31 2015 2014 2015 Assets: Current assets Cash and cash equivalents 726,888 604,571 $ 6,057,400 Marketable securities 19,033 16,635 158,608 Notes and accounts receivable:

More information

1. Operating, Investment and Financial Cash Flows

1. Operating, Investment and Financial Cash Flows 1. Operating, Investment and Financial Cash Flows Solutions Problem 1 During 2005, Myears Oil Co. had gross sales of $1 000,000, cost of goods sold of $400,000, and general and selling expenses of $300,000.

More information

b. To summarize the operating, investing, and financing activities of the business.

b. To summarize the operating, investing, and financing activities of the business. Chapter 24 Statement of Cash Flows LECTURE OUTLINE The material in this chapter can be covered in three class sessions. Students often have difficulty in adjusting transactions recorded on an accrual basis

More information

5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT I. GENERAL PROVISIONS II. KEY DEFINITIONS

5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT I. GENERAL PROVISIONS II. KEY DEFINITIONS APPROVED by Resolution No. 1 of 18 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 5 BUSINESS ACCOUNTING STANDARD CASH FLOW STATEMENT

More information

ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL)

ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL) Page 1 ACC 255 FINAL EXAM REVIEW PACKET (NEW MATERIAL) Complete these sample exam problems/objective questions and check your answers with the solutions at the end of the review file and identify where

More information

ACER INCORPORATED AND SUBSIDIARIES. Consolidated Balance Sheets

ACER INCORPORATED AND SUBSIDIARIES. Consolidated Balance Sheets Consolidated Balance Sheets June 30, 2015, December 31, 2014, and (June 30, 2015 and 2014 are reviewed, not audited) Assets 2015.6.30 2014.12.31 2014.6.30 Current assets: Cash and cash equivalents $ 36,400,657

More information

Analyzing the Statement of Cash Flows

Analyzing the Statement of Cash Flows Analyzing the Statement of Cash Flows Operating Activities NACM Upstate New York Credit Conference 2015 By Ron Sereika, CCE,CEW NACM 1 Objectives of this Educational Session u Show how the statement of

More information

CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS

CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS C H 2 3, P a g e 1 CH 23 STATEMENT OF CASH FLOWS SELF-STUDY QUESTIONS (note from Dr. N: I have deleted questions for you to omit, but did not renumber the remaining questions) 1. The primary purpose of

More information

Cash Flow Analysis. 15.511 Corporate Accounting Summer 2004. Professor SP Kothari. Sloan School of Management Massachusetts Institute of Technology

Cash Flow Analysis. 15.511 Corporate Accounting Summer 2004. Professor SP Kothari. Sloan School of Management Massachusetts Institute of Technology Cash Flow Analysis 15.511 Corporate Accounting Summer 2004 Professor SP Kothari Sloan School of Management Massachusetts Institute of Technology June 16, 2004 1 Statement of Cash Flows Reports operating

More information

International Financial Accounting (IFA)

International Financial Accounting (IFA) International Financial Accounting (IFA) Preparation and presentation of Financial Statements DEPARTMENT OF BUSINESS AND LAW ROBERTO DI PIETRA SIENA, NOVEMBER 4, 2013 1 INTERNATIONAL FINANCIAL ACCOUNTING

More information

This week its Accounting and Beyond

This week its Accounting and Beyond This week its Accounting and Beyond Monday Morning Session Introduction/Accounting Cycle Afternoon Session Tuesday The Balance Sheet Wednesday The Income Statement The Cash Flow Statement Thursday Tools

More information

What Do I See on Cash Flow Statements?

What Do I See on Cash Flow Statements? Cash Flow Statements» What Do I See on Cash Flow Statements» Learning Objectives and Key Take-aways www.navigatingaccounting.com What Do I See on Cash Flow Statements? L E A R N I N G O B J E C T I V E

More information

> DO IT! Chapter 13. Classification of Cash Flows. Cash from Operating Activities D-1. Solution. Action Plan

> DO IT! Chapter 13. Classification of Cash Flows. Cash from Operating Activities D-1. Solution. Action Plan Chapter 13 > DO IT! Classification of Cash Flows Identify the three types of activities used to report all cash inflows and outflows. Report as operating activities the cash effects of transactions that

More information

Section A: Questions On Fill In The Blanks

Section A: Questions On Fill In The Blanks Section A : 26 FILL IN THE BLANK Section B : 10 TRUE OR FALSE QUESTIONS Section C : 11 Multiple Choice Questions Section A: Questions Fill In The Blanks the right column please insert the items from which

More information

TOPIC LEARNING OBJECTIVE

TOPIC LEARNING OBJECTIVE Topic Mapping 1 Transaction Analysis Understand the effect of various types of transactions on the accounting equation, accounting journal and accounting ledger. Concepts and Skills Accounting Equation

More information

how to prepare a cash flow statement

how to prepare a cash flow statement business builder 4 how to prepare a cash flow statement zions business resource center zions business resource center 2 how to prepare a cash flow statement A cash flow statement is important to your business

More information

SanDisk Corporation Preliminary Condensed Consolidated Statements of Operations (in thousands, except per share amounts, unaudited)

SanDisk Corporation Preliminary Condensed Consolidated Statements of Operations (in thousands, except per share amounts, unaudited) Preliminary Condensed Consolidated Statements of Operations (in thousands, except per share amounts, unaudited) Revenue $ 1,634,011 $ 1,476,263 $ 3,145,956 $ 2,816,992 Cost of revenue 854,640 789,614 1,595,679

More information

MASTER BUDGET - EXAMPLE

MASTER BUDGET - EXAMPLE MASTER BUDGET - EXAMPLE Sales IN UNITS for the previous two months (of last quarter), as well as the sales forecast for next quarter are as follows: Sales Budget Units May sales (ACTUAL) 20 June sales

More information

Statement of Cash Flows

Statement of Cash Flows THE CONTENT AND VALUE OF THE STATEMENT OF CASH FLOWS The cash flow statement reconciles beginning and ending cash by presenting the cash receipts and cash disbursements of an enterprise for an accounting

More information

Cash Flow Statement. Author: Stu James Stu James and Management by the Numbers, Inc.

Cash Flow Statement. Author: Stu James Stu James and Management by the Numbers, Inc. Cash Flow Statement This module provides an introduction to the cash flow statement, one of the essential financial statements. We ll show how to create a cash flow statement using the indirect method

More information

EMERSON AND SUBSIDIARIES CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED)

EMERSON AND SUBSIDIARIES CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) CONSOLIDATED OPERATING RESULTS (AMOUNTS IN MILLIONS EXCEPT PER SHARE, UNAUDITED) TABLE 1 Quarter Ended March 31, Percent Change Net Sales $ 5,854 $ 5,919 1% Costs and expenses: Cost of sales 3,548 3,583

More information

! "#$ %&!& "& ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& "#$ ) &!&.

! #$ %&!& & ' - 3+4 &*!&-.,,5///2!(.//+ & $!- )!* & % +, -).//0)& 7+00///2 *&&.4 &*!&- 7.00///2 )!*.//+ 8 -!% %& #$ ) &!&. ! "#!""#$%$#$#$"& $'"()*+,$-).,/ 012! "#$ %&!& "& '!(&)!*&%+,-).//0 -#$#3-4' &,'1$1# $!-!(.//0)& +01+///2 *&& - 3+4 &*!&-.,,5///2!(.//+ &!(!-6%(!(.//.$(!(.//0)& 01,///2 //+2% &*!&- 5,0///2 //32%!(.//+

More information

Cash Flow Statements

Cash Flow Statements STATUTORY BOARD FINANCIAL SB-FRS 7 REPORTING STANDARD Cash Flow Statements SB-FRS 7 Cash Flow Statements applies to Statutory Boards for annual periods beginning on or after 1 January 2009. This Standard

More information

Accounting and Reporting Policy FRS 102. Staff Education Note 1 Cash flow statements

Accounting and Reporting Policy FRS 102. Staff Education Note 1 Cash flow statements Staff Education Note 1: Cash flow Statements Accounting and Reporting Policy FRS 102 Staff Education Note 1 Cash flow statements Disclaimer This Education Note has been prepared by FRC staff for the convenience

More information

STATEMENT OF CASH FLOWS

STATEMENT OF CASH FLOWS Institute of Chartered Accountants of New Zealand FINANCIAL REPORTING NO. 10 1994 STATEMENT OF CASH FLOWS Issued by the Financial Reporting Standards Board Institute of Chartered Accountants of New Zealand

More information

EMC CORPORATION Consolidated Income Statements (in thousands, except per share amounts) Unaudited

EMC CORPORATION Consolidated Income Statements (in thousands, except per share amounts) Unaudited EMC CORPORATION Consolidated Income Statements (in thousands, except per share amounts) March 31, March 31, 2012 2011 Revenues: Product sales $ 3,068,857 $ 2,931,259 Services 2,025,521 1,676,359 5,094,378

More information

Statement of Cash Flows: Reporting and Analysis

Statement of Cash Flows: Reporting and Analysis Statement of Cash Flows: Reporting and Analysis Statement of Cash Flows: Reporting and Analysis Copyright 2014 by DELTACPE LLC All rights reserved. No part of this course may be reproduced in any form

More information

ITRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS

ITRON, INC. CONSOLIDATED STATEMENTS OF OPERATIONS , INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Revenues $ 497,590 $ 446,746 Cost of revenues 334,387 308,324 Gross profit 163,203 138,422 Operating expenses

More information

Consolidated Interim Earnings Report

Consolidated Interim Earnings Report Consolidated Interim Earnings Report For the Six Months Ended 30th September, 2003 23th Octorber, 2003 Hitachi Capital Corporation These financial statements were prepared for the interim earnings release

More information

STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS

STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS C H A P T E R 1 0 STATEMENT OF CASH FLOWS AND WORKING CAPITAL ANALYSIS I N T R O D U C T I O N Historically, profit-oriented businesses have used the accrual basis of accounting in which the income statement,

More information

ACCOUNTING FOR NON-ACCOUNTANTS

ACCOUNTING FOR NON-ACCOUNTANTS Deutsch and Chikarovski's ACCOUNTING FOR NON-ACCOUNTANTS A Question and Answer Handbook Robert Deutsch and Kris Chikarovski THE FEDERATION PRESS 2012 Preface - x Who is this book for? x What is in this

More information

AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions)

AMAZON.COM, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) CONSOLIDATED STATEMENTS OF CASH FLOWS CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD $ 8,084 $ 5,269 $ 3,777 OPERATING ACTIVITIES: Net income (loss) 274 (39) 631 Adjustments to reconcile net income (loss)

More information

WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS. (in millions; unaudited) ASSETS

WESTERN DIGITAL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS. (in millions; unaudited) ASSETS CONDENSED CONSOLIDATED BALANCE SHEETS (in millions; unaudited) ASSETS Apr. 1, July 3, 2016 2015 Current assets: Cash and cash equivalents $ 5,887 $ 5,024 Short-term investments 146 262 Accounts receivable,

More information

ČEZ, a. s. BALANCE SHEET in accordance with IFRS as of March 31, 2015 in CZK Millions

ČEZ, a. s. BALANCE SHEET in accordance with IFRS as of March 31, 2015 in CZK Millions BALANCE SHEET Assets Property, plant and equipment: 31. 03. 2015 31. 12. 2014 Plant in service 345,012 344,246 Less accumulated provision for depreciation (199,841) (196,333) Net plant in service 145,171

More information

Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows

Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows Contents Indian Accounting Standard (Ind AS) 7 Statement of Cash Flows Paragraphs OBJECTIVE SCOPE 1 3 BENEFITS OF CASH FLOW INFORMATION 4 5 DEFINITIONS 6 9 Cash and cash equivalents 7 9 PRESENTATION OF

More information

Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting

Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting Fuqua School of Business, Duke University ACCOUNTG 510: Foundations of Financial Accounting Lecture Note: Financial Statement Basics, Transaction Recording, and Terminology I. The Financial Reporting Package

More information

CASH FLOW STATEMENT (AND FINANCIAL STATEMENT)

CASH FLOW STATEMENT (AND FINANCIAL STATEMENT) CASH FLOW STATEMENT (AND FINANCIAL STATEMENT) - At the most fundamental level, firms do two different things: (i) They generate cash (ii) They spend it. Cash is generated by selling a product, an asset

More information

ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING

ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING ACC 120 PRINCIPLES OF FINANCIAL ACCOUNTING COURSE DESCRIPTION: Prerequisites ENG 090, and RED 090 or DRE 098; MAT 070 or DMA 010, 020, 030, 040, or satisfactory score on placement test Corequisites: None

More information

ČEZ, a. s. BALANCE SHEET in accordance with IFRS as of June 30, 2014 in CZK Millions

ČEZ, a. s. BALANCE SHEET in accordance with IFRS as of June 30, 2014 in CZK Millions BALANCE SHEET Assets Property, plant and equipment: 30. 6. 2014 31. 12. 2013 Plant in service 319 440 319 081 Less accumulated provision for depreciation (188 197) (182 282) Net plant in service 131 243

More information

The Financial Statements

The Financial Statements CHAPTER 2 The Financial Statements SYNOPSIS The author opens the chapter with an illustration of the flow of capital through a business. Operating, investing and financing activities are introduced. The

More information

16 BUSINESS ACCOUNTING STANDARD CONSOLIDATED FINANCIAL STATEMENTS AND INVESTMENTS IN SUBSIDIARIES I. GENERAL PROVISIONS

16 BUSINESS ACCOUNTING STANDARD CONSOLIDATED FINANCIAL STATEMENTS AND INVESTMENTS IN SUBSIDIARIES I. GENERAL PROVISIONS APPROVED by Resolution No. 10 of 10 December 2003 of the Standards Board of the Public Establishment the Institute of Accounting of the Republic of Lithuania 16 BUSINESS ACCOUNTING STANDARD CONSOLIDATED

More information

T-Account Approach to Preparing a Statement of Cash Flows Indirect Method

T-Account Approach to Preparing a Statement of Cash Flows Indirect Method 266 Part 1 E M Foundations of Financial Accounting With these adjustments to the income statement, we can now present the operating activities section of the statement of cash flows using either the direct

More information

Statement of Cash Flows

Statement of Cash Flows HOSP 2110 (Management Acct) Learning Centre Statement of Cash Flows The Statement of Cash Flows (or cash flow statement) is one of the main financial statements used by investors. It shows the cash generated

More information

Chapter 21 The Statement of Cash Flows Revisited

Chapter 21 The Statement of Cash Flows Revisited Chapter 21 The Statement of Cash Flows Revisited AACSB assurance of learning standards in accounting and business education require documentation of outcomes assessment. Although schools, departments,

More information

Solutions to Chapter 3. Accounting and Finance

Solutions to Chapter 3. Accounting and Finance Solutions to Chapter 3 Accounting and Finance 1. Sophie s Sofas Liabilities & Assets Shareholders Equity Cash $ 10,000 Accounts payable $ 17,000 Accounts receivable 22,000 Long-term debt 170,000 Inventory

More information

CHAPTER 4. FINANCIAL STATEMENTS

CHAPTER 4. FINANCIAL STATEMENTS CHAPTER 4. FINANCIAL STATEMENTS Accounting standards require statements that show the financial position, earnings, cash flows, and investment (distribution) by (to) owners. These measurements are reported,

More information

EXERCISES. The cash from operating activities detail is provided as follows for class discussion:

EXERCISES. The cash from operating activities detail is provided as follows for class discussion: EXERCISES Ex. 14 1 There were net additions, such as depreciation and amortization of intangible assets of $389 million, to the net loss reported on the income statement to convert the net loss from the

More information

AS 3 CASH FLOW STATEMENTS. CA Final Course Paper Financial Reporting Chapter 1 Unit 4 CA. B. GANESH

AS 3 CASH FLOW STATEMENTS. CA Final Course Paper Financial Reporting Chapter 1 Unit 4 CA. B. GANESH AS 3 CASH FLOW STATEMENTS CA Final Course Paper Financial Reporting Chapter 1 Unit 4 CA. B. GANESH Contents Applicability Objective Scope Benefits of Cash Flow Information Definitions Cash and Cash Equivalents

More information

International Financial Reporting Standards (IFRS)

International Financial Reporting Standards (IFRS) FACT SHEET September 2011 IAS 7 Statement of Cash Flows (This fact sheet is based on the standard as at 1 January 2010.) Important note: This fact sheet is based on the requirements of the International

More information

Audit Report of Independent Certified Public Accountants

Audit Report of Independent Certified Public Accountants Audit Report of Independent Certified Public Accountants The Board of Directors Acer Incorporated: We have audited the non-consolidated balance sheets of Acer Incorporated (the Company ) as of June 30,

More information

Cash Flow. Summary. Cash Flow. Louise Söderberg, 2010-10-15

Cash Flow. Summary. Cash Flow. Louise Söderberg, 2010-10-15 Cash Flow Louise Söderberg, 2010-10-15 Summary The statement of cash flow reports the cash generated and used during the time interval specified in its headings. A cash flow analysis is a method of checking

More information

CASH FLOW STATEMENT. On the statement, cash flows are segregated based on source:

CASH FLOW STATEMENT. On the statement, cash flows are segregated based on source: CASH FLOW STATEMENT On the statement, cash flows are segregated based on source: Operating activities: involve the cash effects of transactions that enter into the determination of net income. Investing

More information

The Income Statement and Statement of Cash Flows

The Income Statement and Statement of Cash Flows THE STATEMENT OF CASH FLOWS Purpose of the Statement of Cash Flows The purpose of the statement of cash flows is to identify the sources and uses of cash and the change in cash from the beginning to the

More information

International Accounting Standard 7 Statement of cash flows *

International Accounting Standard 7 Statement of cash flows * International Accounting Standard 7 Statement of cash flows * Objective Information about the cash flows of an entity is useful in providing users of financial statements with a basis to assess the ability

More information

Statement of Cash Flows (Topic 230)

Statement of Cash Flows (Topic 230) Proposed Accounting Standards Update Issued: April 28, 2016 Comments Due: June 27, 2016 Statement of Cash Flows (Topic 230) Restricted Cash a consensus of the FASB Emerging Issues Task Force The Board

More information

CASH FLOW STATEMENT. MODULE - 6A Analysis of Financial Statements. Cash Flow Statement. Notes

CASH FLOW STATEMENT. MODULE - 6A Analysis of Financial Statements. Cash Flow Statement. Notes MODULE - 6A Cash Flow Statement 30 CASH FLOW STATEMENT In the previous lesson, you have learnt various types of analysis of financial statements and its tools such as comparative statements, common size

More information

Course pack Accounting 202 Chapter 13: Cash Flow Statement

Course pack Accounting 202 Chapter 13: Cash Flow Statement Course pack Accounting 202 Chapter 13: Cash Flow Statement Value Chapter Included 13 Purpose of Cash Flow Understand Operating, Investing, Financing activities Prepare a Cash Flow Statement indirect only

More information

Statement of Cash Flows

Statement of Cash Flows PREPARING THE STATEMENT OF CASH FLOWS: THE INDIRECT METHOD OF REPORTING CASH FLOWS FROM OPERATING ACTIVITIES The work sheet method described in the text book is not the recommended approach. We will provide

More information

Preparing a Successful Financial Plan

Preparing a Successful Financial Plan Topic 9 Preparing a Successful Financial Plan LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the overview of accounting methods; 2. Prepare the three major financial statements

More information

Reporting and Analyzing Cash Flows QUESTIONS

Reporting and Analyzing Cash Flows QUESTIONS Chapter 12 Reporting and Analyzing Cash Flows QUESTIONS 1. The purpose of the cash flow statement is to report all major cash receipts (inflows) and cash payments (outflows) during a period. It helps users

More information

Non-Current (Fixed) Asset Account required in different situations while preparing Cash Flow Statement

Non-Current (Fixed) Asset Account required in different situations while preparing Cash Flow Statement required in different situations while preparing Cash Flow Statement To find the value of the assets bought during the year? To find the value of the assets sold during the year? To find the value of the

More information

UNDERSTANDING CANADIAN PUBLIC SECTOR FINANCIAL STATEMENTS

UNDERSTANDING CANADIAN PUBLIC SECTOR FINANCIAL STATEMENTS June 2014 UNDERSTANDING CANADIAN PUBLIC SECTOR FINANCIAL STATEMENTS www.bcauditor.com TABLE OF CONTENTS Who Will Find this Guide Helpful 3 What a Set of Public Sector Financial Statements Includes 5 The

More information

NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS

NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS NAS 03 NEPAL ACCOUNTING STANDARDS ON CASH FLOW STATEMENTS CONTENTS Paragraphs OBJECTIVE SCOPE 1-3 BENEFITS OF CASH FLOWS INFORMATION 4-5 DEFINITIONS 6-9 Cash and cash equivalents 7-9 PRESENTATION OF A

More information

IPSAS 2 CASH FLOW STATEMENTS

IPSAS 2 CASH FLOW STATEMENTS IPSAS 2 CASH FLOW STATEMENTS Acknowledgment This International Public Sector Accounting Standard (IPSAS) is drawn primarily from International Accounting Standard (IAS) 7, Cash Flow Statements published

More information

Module 6 : Cash Flow. Lecture 1 : Cash Flow Statement

Module 6 : Cash Flow. Lecture 1 : Cash Flow Statement Module 6 : Cash Flow Lecture 1 : Cash Flow Statement Objectives In this lecture you will learn the following Introduction Cash Flow Statement. Meaning. Applicability. Cash and Cash equivalents. Meaning

More information

INTERNATIONAL FINANCIAL STATEMENT ANALYSIS

INTERNATIONAL FINANCIAL STATEMENT ANALYSIS INTERNATIONAL FINANCIAL STATEMENT ANALYSIS Second Edition Thomas R. Robinson, CFA Elaine Henry, CFA Wendy L. Pirie, CFA Michael A. Broihahn, CFA WILEY John Wiley & Sons, Inc. ;;.s»»fi«^ CONTENTS Foreword

More information

Long-Term Debt. Objectives: simple present value calculations. Understand the terminology of long-term debt Par value Discount vs.

Long-Term Debt. Objectives: simple present value calculations. Understand the terminology of long-term debt Par value Discount vs. Objectives: Long-Term Debt! Extend our understanding of valuation methods beyond simple present value calculations. Understand the terminology of long-term debt Par value Discount vs. Premium Mortgages!

More information

ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS

ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS ILLUSTRATION 5-1 BALANCE SHEET CLASSIFICATIONS MAJOR BALANCE SHEET CLASSIFICATIONS ASSETS = LIABILITIES + OWNERS' EQUITY Current Assets Long-Term Investments Current Liabilities Long-Term Debt Capital

More information

Cash Flow Analysis. 15.501/516 Accounting Spring 2004. Professor S. Roychowdhury. Sloan School of Management Massachusetts Institute of Technology

Cash Flow Analysis. 15.501/516 Accounting Spring 2004. Professor S. Roychowdhury. Sloan School of Management Massachusetts Institute of Technology Cash Flow Analysis 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology Mar 1/3, 2004 1 About The Exam March 10 th a week from today.

More information

THE STATEMENT OF CASH FLOWS

THE STATEMENT OF CASH FLOWS THE STATEMENT OF CASH FLOWS Associate Professor PhD Cernusca Lucian University Aurel Vlaicu of Arad, luciancernusca_ro@yahoo.com Professor PhD Mates Dorel, West University of Timisoara Abstract: In today

More information

Income Measurement and Profitability Analysis

Income Measurement and Profitability Analysis PROFITABILITY ANALYSIS The following financial statements for Spencer Company will be used to demonstrate the calculation of the various ratios in profitability analysis. Spencer Company Comparative Balance

More information

CHAPTER 23. Statement of Cash Flows 1, 2, 7, 8, 12 3, 4, 5, 6, 16, 17, 19 9, 20 4, 5, 9, 10, 11 10, 13, 15, 16. 7. Worksheet adjustments.

CHAPTER 23. Statement of Cash Flows 1, 2, 7, 8, 12 3, 4, 5, 6, 16, 17, 19 9, 20 4, 5, 9, 10, 11 10, 13, 15, 16. 7. Worksheet adjustments. CHAPTER 23 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis 1. Format, objectives purpose, and source of statement.

More information

Operating Revenues Service revenues and other $ 28,217 $ 28,611 (1.4) Wireless equipment revenues 3,954 3,373 17.2 Total Operating Revenues

Operating Revenues Service revenues and other $ 28,217 $ 28,611 (1.4) Wireless equipment revenues 3,954 3,373 17.2 Total Operating Revenues Condensed Consolidated Statements of Income (dollars in millions, except per share amounts) Operating Revenues Service revenues and other $ 28,217 $ 28,611 (1.4) Wireless equipment revenues 3,954 3,373

More information

2-8. Identify whether each of the following items increases or decreases cash flow:

2-8. Identify whether each of the following items increases or decreases cash flow: Problems 2-8. Identify whether each of the following items increases or decreases cash flow: Increase in accounts receivable Increase in notes payable Depreciation expense Increase in investments Decrease

More information

Chapter 3. Cash-Flow Statements

Chapter 3. Cash-Flow Statements Introduction to Cash-Flow Statements 1 Chapter 3 Cash-Flow Statements TABLE OF CONTENTS Introduction 3 Direct Format Operating Section 5 Indirect Format Operating Section 6 Exercise 3.01 7 What Do I See?

More information

Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements

Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements Understanding Financial Information for Bankruptcy Lawyers Understanding Financial Statements In the United States, businesses generally present financial information in the form of financial statements

More information

A Simple Model. The Accounting Equation

A Simple Model. The Accounting Equation An introduction to the accounting equation in the context of building a financial model. This series introduces the financial statements in the context of a financial model. NOTES TO ACCOMPANY VIDEOS These

More information

Cash Flow Construction Indirect Method Statement of Cash Flows

Cash Flow Construction Indirect Method Statement of Cash Flows Cash Flow Construction Indirect Method Statement of Cash Flows Charles W. Mulford Invesco Chair and Professor of Accounting Scheller College of Business Georgia Institute of Technology Atlanta, GA 30332

More information

NET TURIZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND IT S SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 DECEMBER 2014

NET TURIZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND IT S SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 DECEMBER 2014 NET TURIZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND IT S SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 DECEMBER 2014 NET TURİZM TİCARET VE SANAYİ ANONİM ŞİRKETİ CONTENTS CONSOLIDATED

More information

Accrual Accounting Fundamentals

Accrual Accounting Fundamentals Accrual Accounting Fundamentals A Primer To assist in maintaining the knowledge and skills after training. Outline of program Introduction to Accrual Accounting Terminology - Definitions Key Financial

More information

Statement of Cash Flows

Statement of Cash Flows STATUTORY BOARD FINANCIAL REPORTING STANDARD SB-FRS 7 Statement of Cash Flows This version of SB-FRS 7 does not include amendments that are effective for annual periods beginning after 1 January 2014.

More information

SEAGATE TECHNOLOGY PLC CONDENSED CONSOLIDATED BALANCE SHEETS

SEAGATE TECHNOLOGY PLC CONDENSED CONSOLIDATED BALANCE SHEETS CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) June 28, ASSETS Current assets: Cash and cash equivalents $ 2,259 $ 1,708 Short-term investments 47 480 Restricted cash and investments 4 101 Accounts

More information

The Basic Framework of Budgeting

The Basic Framework of Budgeting Master Budgeting 1 The Basic Framework of Budgeting A budget is a detailed quantitative plan for acquiring and using financial and other resources over a specified forthcoming time period. 1. The act of

More information

CHAPTER 4 The Mechanics of Financial Accounting

CHAPTER 4 The Mechanics of Financial Accounting CHAPTER 4 The Mechanics of Financial Accounting SYNOPSIS This chapter covers the mechanics underlying preparation of financial statements and how they help to ensure that a company s transactions are accurately

More information

Statement of Change in Working Capital & Inflows/Outflows of Working Capital

Statement of Change in Working Capital & Inflows/Outflows of Working Capital HOSP 2110 (Management Acct) Learning Centre Statement of Change in Working Capital & Inflows/Outflows of Working Capital The statement of changes in working capital shows the net change in working capital

More information

NET TURİZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 MARCH 2014

NET TURİZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 MARCH 2014 NET TURİZM TİCARET VE SANAYİ ANONİM ŞİRKETİ AND ITS SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED AT 31 MARCH 2014 CONTENTS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF

More information

FINANCIAL INFORMATION FOR THE FIRST QUARTER 2015 (Condensed and Unaudited)

FINANCIAL INFORMATION FOR THE FIRST QUARTER 2015 (Condensed and Unaudited) FINANCIAL INFORMATION FOR THE FIRST QUARTER 2015 (Condensed and Unaudited) Page Financial Statements (IFRS, Unaudited) Consolidated Income Statements Consolidated Statements of Financial Position Consolidated

More information

LESSON 3. Balance Sheet

LESSON 3. Balance Sheet LESSON 3 Balance Sheet 1 Outline 3.1. Introduction: definition and purpose. 3.2. Format of the Balance Sheet. 3.3. Assets. 2.3.1. Non-current assets. 2.3.2. Current assets. 3.4. Equity. 3.4.1. Shareholders

More information

Vertical and Horizontal Analysis. Financial Analysis. Lecturer: Dr. Constantinos Adamides

Vertical and Horizontal Analysis. Financial Analysis. Lecturer: Dr. Constantinos Adamides Vertical and Horizontal Analysis Financial Analysis Lecturer: Dr. Constantinos Adamides Horizontal Analysis Comparison of financial information of a single company for two more years Examination of absolute

More information

APPENDIX 1 The Statement of Financial Position

APPENDIX 1 The Statement of Financial Position APPENDIX 1 The Statement of Financial Position 1. Assets: the resources of the organization which are used to provide service and generate value 2. Current assets: assets which can be converted to cash

More information

Consolidated balance sheet

Consolidated balance sheet Consolidated balance sheet Non current assets 31/12/2009 31/12/2008 (*) 01/01/2008 (*) Property, plant and equipment 1,352 1,350 1,144 Investment property 7 11 11 Fixed assets held under concessions 13,089

More information

Bonds. Accounting for Long-Term Debt. Agenda Long-Term Debt. 15.501/516 Accounting Spring 2004

Bonds. Accounting for Long-Term Debt. Agenda Long-Term Debt. 15.501/516 Accounting Spring 2004 Accounting for Long-Term Debt 15.501/516 Accounting Spring 2004 Professor S. Roychowdhury Sloan School of Management Massachusetts Institute of Technology April 5, 2004 1 Agenda Long-Term Debt Extend our

More information

Consolidated balance sheet

Consolidated balance sheet 83 Consolidated balance sheet December 31 Non-current assets Goodwill 14 675.1 978.4 Other intangible assets 14 317.4 303.8 Property, plant, and equipment 15 530.7 492.0 Investment in associates 16 2.5

More information