Term
| What are the three ways companies generate cash flows? |
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Definition
- Investing
- Operations
- Financing
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Term
Net Cash Flows from Operating Activies relate to...
1. ______________
2. ______________
3. ______________
4._______________ |
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Definition
- the income statement
- current assets
- current liabilities
- Depreciation and Amortization add back
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Term
Net cash flows from investing activities relate to...
1.____________________________________
2.____________________________________ |
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Definition
- the balance sheet's long-term assets
- change in all investment accounts (current and long term)
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Term
Net cash flows from financing activities relate to...
1. ____________________...
a. ___________
b. ___________ |
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Definition
1. the balance sheet's
a. long-term liabilities
b. stockholder's equity (excluding net income in operations) |
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Term
| Under accrual accounting.... |
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Definition
revenues are recognized when EARNED,
and expenses are are recognize when INCURRED! |
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Term
When computing net cash flows, you...
- ___ depreciation expense
- ___ increases in current assets
- ___ decreases in current assets
- ___ increases in current liabilities
- ___ decreases in current liabilities
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Definition
ADD depreciation expense
SUBTRACT increase in current assets
ADD decreases in current assets
ADD increases in current liabilities
SUBTRACCT decreases in current liabilities |
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Term
| What does the depreciation adjustment do? |
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Definition
| it ZEROES out this noncash expense, which is deducted when computing net income. |
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Term
In accrual accounting, when calculating net income, in order to accurately record cash flows, we must...
______ increase in receivables from net income
______ decrease in receivables to net income
______ increase in inventories from net income
______ decrease in inventories to net income
_____ increase in payables and accruals to net income
_____decrease in payables and accruals from net income |
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Definition
SUBTRACT increase in receivables
ADD decrease in receivables
SUBTRACT increase in inventories
ADD decrease in inventories
ADD increase in payables/accruals
SUBTRACT decrease in payables/accruals |
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Term
| If you are given Cash Flows from Operations... |
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Definition
| Do not attempt to calculate it again |
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Term
| What are the 4 special items when calculating cash flows: |
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Definition
- Dividends received in Operations
- Dividends paid in Financing
- Interest income in Operations
- Interest paid in Operations
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Term
| The Cash Flow Statement explains... |
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Definition
| the change in cash on the balance sheet for the period. |
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Term
| In the indirect method, Operations starts with... |
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Definition
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