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Ch. 12-Statement of Cash Flows
N/A
10
Accounting
Undergraduate 2
12/09/2015

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Cards

Term
Cash Debt Coverage
Definition
A cash-based ratio used to evaluate solvency, calculated as net cash provided by operating activities divided by average total liabilities.
Term
Current Cash Debt Coverage
Definition
A cash-based ratio used to evaluate liquidity, calculated as net cash provided by operating activities divided by average current liabilities.
Term
Direct Method
Definition
A method of determining net cash provided by operating activities by adjusting each item in the income statement from the accrual basis to the cash basis. The direct method shows operating cash receipts & payments.
Term
Financing Activities
Definition
Cash flow activities that include obtaining cash from issuing debt & repaying the amounts borrowed and obtaining cash from stockholders, repurchasing shares, & paying dividends.
Term
Free Cash Flow
Definition
Net cash provided by operating activities after adjusting for capital expenditures & dividends paid.
Term
Indirect Method
Definition
A method of preparing a statement of cash flows in which net income is adjusted for items that do not affect cash, to determine net cash provided by operating activities.
Term
Investing Activities
Definition
Cash flow activities that include cash transactions that involve the purchase or disposal of investments & property, plant, & equipment using cash & lending money & collecting the loans.
Term
Operating Activities
Definition
Cash flow activities that include the cash effects of transactions that create revenues & expenses & thus enter into the determination of net income.
Term
Product Life Cycle
Definition
A series of phases in a product's sales & cash flows over time. These phases, in order of occurrence, are introductory, growth, maturity, & decline.
Term
Statement of Cash Flows
Definition
A basic financial statement that provides information about the cash receipts & cash payments of an entity during a period, classified as operating, investing, & financing activities, in a format that reconciles the beginning & ending cash balances.
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