Kế toán doanh nghiệp - Chapter 12: Reporting and analyzing cash flows

Financial AccountingJohn J. WildSeventh Edition Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 12Reporting and Analyzing Cash FlowsHow does a company obtain its cash?Where does a company spend its cash?What explains the change in the cash balance?Purpose of theStatement of Cash FlowsC112-*How did the business fund its operations?Did the business borrow any funds or repay any loans?Does the business have sufficient cash to pay its debts as they mature?Did the business make any dividend payments?Importance of Cash FlowsC112-*CashCurrencyCash EquivalentsShort-term, highly liquid investments.Readily convertible into cash.Sufficiently close to maturity so that market value is unaffected by interest rate changes.Measurement of Cash FlowsC112-* The Statement of Cash Flows includes the following three sections:Operating ActivitiesInvesting ActivitiesFinancing ActivitiesClassifying Cash FlowsC112-*OutflowsSalaries and wagesPayments to suppliersTaxes and finesInterest paid to lendersOtherInflowsReceipts from customersCash dividends receivedInterest from borrowersOtherOperating ActivitiesC112-*OutflowsPurchasing long-term productive assetsPurchasing equity investmentsPurchasing debt investmentsOtherInflowsSelling long-term productive assetsSelling investments in securitiesCollecting principal on loansOtherInvesting ActivitiesC112-*OutflowsPay dividendsPurchasing treasury stockRepaying cash loansPaying owners’ withdrawalsInflowsIssuing its own equity securitiesIssuing bonds and notesIssuing short- and long-term liabilitiesFinancing ActivitiesC112-*Format of theStatement of Cash FlowsC112-*Add noncash expenses and losses.Subtract noncash revenues and gains.Start with accrual-basis net income.Then, analyze the changes in current assets and current liabilities. →P212-*Indirect MethodExample – B&G CompanyP312-*Indirect MethodExample – B&G CompanyEnd of Chapter 1212-*