Kế toán, kiểm toán - Chapter 12: Reporting and analyzing cash flows

Financial and Managerial AccountingWild, Shaw, and Chiappetta Fourth Edition McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.Chapter 12Reporting and Analyzing Cash FlowsConceptual Learning ObjectivesC1: Distinguish between operating,  investing, and financing activities,  and describe how noncash  investing and financing activities are  disclosed.12-*Analytical Learning ObjectivesA1: Analyze the statement of cash flows and apply the cash flow on assets total ratio.12-*Procedural Learning ObjectivesP1: Prepare a statement of cash flows.P2: Compute cash flows from operating  activities using the indirect method.P3: Determine cash flows from both investing  and financing activities.P4: Appendix 12A – Illustrate use of a  spreadsheet to prepare a statement of  cash flows (see text for details).P5: Appendix 12B – Compute cash flows from  operating activities using the direct  method.12-*How 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 ActivitiesC 112-*OutflowsPurchasing long-term productive assetsPurchasing equity investmentsPurchasing debt investmentsOtherInflowsSelling long-term productive assetsSelling equity investmentsCollecting principal on loansOtherInvesting ActivitiesC112-*OutflowsPay dividendsPurchasing treasury stockRepaying cash loansPaying owners’ withdrawalsInflowsIssuing its own equity securitiesIssuing bonds and notesIssuing short- and long-term liabilitiesFinancing ActivitiesC 112-*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-*