f14StatementofCashFlowsBusiness(公司金融会计)

Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,C14 -,63,Learning Objectives,Power Notes,1.Purpose of the Statement of Cash Flows,2.Reporting Cash Flows,3.Statement of Cash Flows The Indirect Method,4.Statement of Cash Flows The Direct Method,5.Financial Analysis and Interpretation,Chapter F14,C14,Statement of Cash Flows,Cash Flow Basics,Statement of Cash Flows Two Methods,Changes in Current Accounts,Statement of Cash Flows Indirect Method,Statement of Cash Flows Direct Method,Free Cash Flow,Slide #Power Note Topics,3,20,31,34,39,62,Note:,To select a topic, type the slide # and press Enter.,Power Notes,Chapter F14,Statement of Cash Flows,Reporting Cash Flows,1.,Operating activities,transactions that affect,net income,.,2.,Investing activities,transactions that affect,noncurrent assets,.,3.,Financing activities,transactions that affect,equity,and,debt,of the entity.,The,statement of cash flows,reports a firms major cash inflows and outflows for a period. Cash flows are reported by three types of activities.,Cash Flows,Increases in Cash,Decreases in Cash,Cash,Cash Flows,Increases in Cash,(receipts from revenues),Decreases in Cash,Operating,Cash,Cash Flows,Increases in Cash,(receipts from revenues),(payments for expenses),Decreases in Cash,Operating,Operating,Cash,Cash Flows,Increases in Cash,(receipts from revenues),(payments for expenses),(receipts from sales of noncurrent assets),Decreases in Cash,Operating,Investing,Operating,Cash,Cash Flows,Increases in Cash,(receipts from revenues),(payments for expenses),(receipts from sales of noncurrent assets),(payments for aquiring noncurrent assets),Decreases in Cash,Operating,Investing,Operating,Investing,Cash,Cash Flows,Increases in Cash,(receipts from revenues),(payments for expenses),(receipts from sales of noncurrent assets),(receipts from issuing equity and debt securities),(payments for aquiring noncurrent assets),Decreases in Cash,Operating,Investing,Financing,Operating,Investing,Cash,Cash Flows,Increases in Cash,(receipts from revenues),(payments for dividends, and redemption of debt securities),(payments for expenses),(receipts from sales of noncurrent assets),(receipts from issuing equity and debt securities),(payments for aquiring noncurrent assets),Decreases in Cash,Operating,Investing,Financing,Operating,Investing,Financing,Cash,Cash Flows Operating Activities,Typical cash inflows,Typical cash outflows,What are some of the typical cash,inflows,from,operating,activities?,Cash Flows Operating Activities,Typical cash inflows,Typical cash outflows,Interest Revenue,Sales of goods,and services,Dividend Revenue,What are some of the typical cash,outflows,from,operating,activities?,Cash Flows Operating Activities,Typical cash inflows,Typical cash outflows,Sales of goods,and services,Merchandise purchases,Payments of wages & other expenses,Tax payments,Interest Revenue,Dividend Revenue,Cash Flows Investing Activities,Typical cash inflows,Typical cash outflows,What are some of the typical cash,inflows,from,investing,activities?,Cash Flows Investing Activities,Typical cash inflows,Typical cash outflows,Sales of fixed assets and other long-term investments,Sale of marketable securities and investments,What are some of the typical cash,outflows,from,investing,activities?,Cash Flows Investing Activities,Typical cash inflows,Typical cash outflows,Sales of fixed assets and other long-term investments,Sale of marketable securities and investments,Purchase of fixed assets and other long-term investments,Purchase of,marketable securities and investments,Cash Flows Financing Activities,Typical cash inflows,Typical cash outflows,What are some of the typical cash,inflows,from,financing,activities?,Cash Flows Financing Activities,Typical cash inflows,Typical cash outflows,Sales (issuance),of stock,Sale (issuance) of bonds and other money market debt,Borrowing from banks and other lending institutions,What are some of the typical cash,outflows,from,financing,activities?,Cash Flows Financing Activities,Typical cash inflows,Typical cash outflows,Sales (issuance),of stock,Sale (issuance) of bonds and other money market debt,Purchase of,treasury stock,Repayment and redemption of debt (bonds, notes, other),Payment of cash dividends,Borrowing from banks and other lending institutions,Statement of Cash Flows,1.Generate cash flow from operations.,2.Maintain and expand operating capacity.,3.Pay dividends.,4.Pay debts, including interest, when due.,5.Generate future profits.,The primary attention is the,flow of cash,rather than,net income,.,The,statement of cash flows,is invaluable in assessing the capacity of a firm to achieve goals such as:,Preparing the Statement of Cash Flows,Net cash flows from,operating activities,will be the difference between the,operating cash receipts,and,operating cash payments,.,Net cash flows from,operating activities,is determined by adjusting the,accrual net income,from operations to reflect a,cash-based net income,from operations.,Direct Method,Indirect Method,Advantages of Using the Direct Method,1.Reports the,sources,and,uses,of operating cash receipts and payments.,2.Is,easier to understand,for many investors.,3.,Recommended,by the Financial Accounting Standards Board (FASB).,Note:,The,total amount,of net cash flow from operating activities will be the same for both direct and indirect methods.,Investing,and,Financing,activities sections will be identical for both methods.,Advantages of Using the Indirect Method,1.Focuses on the differences between,net income,and,net cash flow,from,operations,.,2.Reveals the relationship between the,income statement, the,balance sheet, and the,statement of cash flows,.,3.Less costly to prepare.,4.Must be prepared as a,supplemental report,even if the direct method is used.,5.98 percent of companies surveyed use the,indirect method,.,Cash flows from operating activities:,Cash flows from investing activities:,Cash flows from financing activities:,NetSolutionsStatement of Cash Flows Direct MethodFor the Month Ended November 30, 2002,Cash received from customers$ 7,500,Deduct cash payments for expenses,and payment to creditors4,600,Net cash flow from operating activities$ 2,900,Cash payments for acquiring land (10,000),Cash received as owners investment$15,000,Deduct cash withdrawal by owner2,000,Net cash flow from financing activities13,000,Net cash flow and ending cash balance$ 5,900,Cash flows from operating activities:,Cash flows from investing activities:,Cash flows from financing activities:,Net income, per income statement$ 3,050,Add increase in accounts payable400,Deduct increase in supplies (550),Net cash flow from operating activities$ 2,900,Cash payments for acquiring of land (10,000),Cash received as owners investment$15,000,Deduct cash withdrawal by owner2,000,Net cash flow from financing activities13,000,Net cash flow and ending cash balance$ 5,900,NetSolutionsStatement of Cash Flows Indirect MethodFor the Month Ended November 30, 2002,Cash flows from operating activities:,NetSolutionsStatement of Cash Flows Direct MethodFor the Month Ended November 30, 2002,Cash flows from operating activities:,NetSolutionsStatement of Cash Flows Indirect MethodFor the Month Ended November 30, 2002,Cash received from customers$ 7,500,Deduct cash payments for expenses,and payment to creditors4,600,Net cash flow from operating activities$ 2,900,Net income, per income statement$ 3,050,Add increase in accounts payable400,Deduct increase in supplies (550),Net cash flow from operating activities$ 2,900,Cash flows from operating activities:,NetSolutionsStatement of Cash Flows Direct MethodFor the Month Ended November 30, 2002,Cash flows from operating activities:,NetSolutionsStatement of Cash Flows Indirect MethodFor the Month Ended November 30, 2002,Cash received from customers$ 7,500,Deduct cash payments for expenses,and payment to creditors4,600,Net cash flow from operating activities,$ 2,900,Net income, per income statement$ 3,050,Add increase in accounts payable400,Deduct increase in supplies (550),Net cash flow from operating activities,$ 2,900,Cash Relationships and Cash Flows,Cash,Liabilities,Stockholders,Equity,Balance Sheet,Noncash,Assets,Assets = Liabilities + Stockholders Equity,Cash + Noncash Assets = Liabilities + Stockholders Equity,Cash = Liabilities + Stockholders Equity Noncash Assets,Cash,Liabilities,Stockholders,Equity,Balance Sheet,Noncash,Assets,Assets = Liabilities + Stockholders Equity,Cash + Noncash Assets = Liabilities + Stockholders Equity,Cash,= Liabilities + Stockholders Equity Noncash Assets,Cash Relationships and Cash Flows,Cash,Liabilities,Stockholders,Equity,Balance Sheet,Noncash,Assets,The cash flows are determined by analyzing liabilities, stockholders equity, and noncash assets.,Assets = Liabilities + Stockholders Equity,Cash + Noncash Assets = Liabilities + Stockholders Equity,Cash,= Liabilities + Stockholders Equity Noncash Assets,1,2,3,1,2,3,Cash Relationships and Cash Flows,Determine the debit or credit change of each item above.,Changes in Current Accounts,Change,Accounts 2003 2002 DebitCredit,Trade receivables (net)$74,000$65,000,Inventories172,000180,000,Accounts payable (mdse.)43,50046,700,Accrued expenses payable26,50024,300,Income taxes payable7,9008,400,9,000,8,000,3,200,2,200,500,Changes in Current Accounts,Change,Accounts 2003 2002 DebitCredit,Trade receivables (net)$74,000$65,000,Inventories172,000180,000,Accounts payable (mdse.)43,50046,700,Accrued expenses payable26,50024,300,Income taxes payable7,9008,400,9,000,8,000,3,200,2,200,500,These,debit changes,are subtracted from,net income,in the,operating activities,section of the,statement of cash flows.,Think of these debits as,deductions,from net income in arriving at net cash flow from operations.,Changes in Current Accounts,Change,Accounts 2003 2002 DebitCredit,Trade receivables (net)$74,000$65,000,Inventories172,000180,000,Accounts payable (mdse.)43,50046,700,Accrued expenses payable26,50024,300,Income taxes payable7,9008,400,9,000,8,000,3,200,2,200,500,These,credit changes,are added to,net income,in the,operating activities,section of the,statement of cash flows.,Think of these credits as,additions,to net income in arriving at net cash flow from operations.,Cash flows from operating activities:,Operating Activities Indirect Method,Start with the,accrual basis net income,shown on the,income statement,.,Net income, per income statement$108,000,Depreciation$ 7,000,Decrease in inventories8,000,Increase in accrued expenses2,20017,200,$125,200,Increase in accounts receivables$ 9,000,Decrease in accounts payable3,200,Decrease in income taxes payable500,Gain on sale of land12,00024,700,Net cash flow from operating activities$100,500,Deduct:,Add:,Cash flows from operating activities:,Operating Activities Indirect Method,Because depreciation expense reduced net income but did not require an outflow of cash, it is added back to net income.,Net income, per income statement$108,000,Depreciation$ 7,000,Decrease in inventories8,000,Increase in accrued expenses2,20017,200,$125,200,Increase in accounts receivables$ 9,000,Decrease in accounts payable3,200,Decrease in income taxes payable500,Gain on sale of land12,00024,700,Net cash flow from operating activities$100,500,Deduct:,Add:,Cash flows from operating activities:,Operating Activities Indirect Method,These represent,credit changes,in the current accounts. Think of these credits as additional income from a cash perspective.,Why do these represent an increased cash flow?,Net income, per income statement$108,000,Depreciation$ 7,000,Decrease in inventories8,000,Increase in accrued expenses2,20017,200,$125,200,Increase in accounts receivables$ 9,000,Decrease in accounts payable3,200,Decrease in income taxes payable500,Gain on sale of land12,00024,700,Net cash flow from operating activities$100,500,Deduct:,Add:,Cash flows from operating activities:,Operating Activities Indirect Method,These represent,debit changes,in the current accounts. Think of these debits as additional expense from a cash perspective.,Why do these represent a reduced cash flow?,Net income, per income statement$108,000,Depreciation$ 7,000,Decrease in inventories8,000,Increase in accrued expenses2,20017,200,$125,200,Increase in accounts receivables$ 9,000,Decrease in accounts payable3,200,Decrease in income taxes payable500,Gain on sale of land12,00024,700,Net cash flow from operating activities$100,500,Deduct:,Add:,Cash flows from operating activities:,Operating Activities Indirect Method,This gain was included in net income but did not represent an operating cash flow. The related cash inflow from the sale is reported in the,cash flows from investing activities section,.,Net income, per income statement$108,000,Depreciation$ 7,000,Decrease in inventories8,000,Increase in accrued expenses2,20017,200,$125,200,Increase in accounts receivables$ 9,000,Decrease in accounts payable3,200,Decrease in income taxes payable500,Gain on sale of land12,00024,700,Net cash flow from operating activities$100,500,Deduct:,Add:,These,changes,in current accounts were used to prepare the statement of cash flows with the,indirect method,. They will also be used for the,direct method,that follows.,Changes in Current Accounts,Change,Accounts 2003 2002 DebitCredit,Trade receivables (net)$74,000$65,000,Inventories172,000180,000,Accounts payable (mdse.)43,50046,700,Accrued expenses payable26,50024,300,Income taxes payable7,9008,400,9,000,8,000,3,200,2,200,500,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,Cost of merchandise sold790,000,Gross profit$ 390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$ 187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,This is an accrual basis income statement.,The,direct method,of reporting cash flows will essentially convert this to a cash basis statement.,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$960,000,Cost of merchandise sold580,000,Gross profit$380,000,Operating expenses:,Depreciation expense$ 18,000,Other operating expenses260,000,Total operating expenses278,000,Income from operations$102,000,Other income:,Gain on sale of investments$30,000,Other expense:,Interest expense14,00016,000,Income before income tax$118,000,Income tax27,500,Net income$ 90,500,Debit Credit,Sales960,000,Receivables9,000,Cash,Changes,Cash collected,from customers,Note,:,All,income statement account balances,are zero at the beginning of a period. Therefore, the balance shown represents the,amount of change,during the period.,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,Cost of merchandise sold790,000,Gross profit$390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Sales1,180,000,Receivables9,000,Cash,1,171,000,Changes,Cash collected,from customers,Note,:,The,changes,in the current balance sheet accounts are determined by comparing the beginning and ending balances. Receivables increased by $9,000 during the period.,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000,Gross profit$390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Sales1,180,000,Receivables9,000,Cash,1,171,000,Changes,Cash collected,from customers,The,increase in receivables,represents a,reduction in cash inflow,relative to the accrual revenue reported on the income statement.,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000,Gross profit$390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Cost of mdse. sold790,000,Inventories8,000,Accounts payable3,200,Cash,Changes,Cash payments for,merchandise,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000785,200,Gross profit$390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Cost of mdse. sold790,000,Inventories8,000,Accounts payable3,200,Cash,785,200,Changes,Cash payments for,merchandise,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000785,200,Gross profit$390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Cost of mdse. sold790,000,Inventories8,000,Accounts payable3,200,Cash,785,200,Changes,Cash payments for,merchandise,A,decrease,in,inventories (credit change),and an,decrease,in,accounts payable (debit change),have the opposite effects.,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000(785,200),Gross profit$ 390,000,Operating expenses:,Depreciation expense$ 7,000,Other operating expenses196,000,Total operating expenses203,000,Income from operations$187,000,Other income:,Gain on sale of land$12,000,Other expense:,Interest expense8,0004,000,Income before income tax$ 191,000,Income tax83,000,Net income$ 108,000,Debit Credit,Depr. expense7,000,Accum. depreciation7,000,Changes,Depreciation,Rundell Inc.Income StatementFor the Year Ended December 31, 2003,Cash Basis,Sales$1,180,000,$1,171,000,Cost of merchandise sold790,000(785,200),Gross profit$ 390,000,Operating expenses:,Depreciation expense$ 7,0000,Other operating expenses196,000,Total operating expenses203,000,Income from