Libby2ce_Ch 05——北美会计原理.pptVIP

Financial Accounting Robert Libby, Patricia A. Libby, Daniel G. Short, George Kanaan, Maureen Gowing Chapter 5 Business Background Positive cash flows permit a company to . . . Classifications on the Cash Flow Statement Classifications on the Cash Flow Statement The Cash Flow Statement must include the following three sections: Operating Activities Investing Activities Financing Activities Cash Flows from Operating Activities Cash Flows from Operating Activities Cash Flows from Operating Activities Cash Flows from Operating Activities - Direct Method Cash Flows from Operating Activities - Indirect Method Cash Flows from Investing Activities Cash Flows from Financing Activities Relationships to the Balance Sheet and the Income Statement Information needed to prepare a cash flow statement: Comparative Balance Sheets Income Statement Additional details concerning different types of transactions and events Relationships to the Balance Sheet and the Income Statement Relationships to the Balance Sheet and the Income Statement Cash Flow Statement Although the operating section can be prepared in one of the two formats (Direct or Indirect Method) we will discuss the Indirect Method, the method most commonly used, in the following example. Cash Flow StatementExample of Indirect Method A Comparison of the Direct and Indirect Methods End of Chapter 5 Copyright ? 2006 McGraw-Hill Ryerson . 5-* Second CANADIAN edition Reporting and Interpreting Cash Flows expand its operations replace needed assets take advantage of market opportunities pay dividends to owners Financial analysts consider cash flow an important indicator of a company’s financial health. Cash Currency Cash Equivalents Short-term, highly liquid investments. Readily convertible into cash. So near maturity that market value is unaffected by interest rate changes. Sleeman Breweries uses the indirect method. The indirect method is used by most companies. Statement continued . . . This ending cash ba