CashFlowAnalysis(英文版)(ppt30页)课件.ppt

Cash Flow Analysis Cash Flow Analysis Session 6 This session In case you missed the last session……. We covered ………. IE Balance Sheets The linkages between IE and Balance Sheets Business Challenges Earn Profits Convert Profits to Cash as Fast as Possible Cash Flow From Operating Activities From Investing Activities From Financing Activities Cash Flow from Operations Profit (“the bottom line” of the IE Statement) Plus 7 year-to-year change adjustments (Balance Sheet) Accounts receivable Inventory Prepaid expenses Depreciation Accounts Payable Accrued Expenses Income Tax Payable Operating Cash Flow Comments Net Income is from the bottom line of IE Statement (Depreciation Adjusted) Increases in Operating Assets decrease cash flow from profit (AR, Inventory, Prepaid Expenses) Increases in liabilities “help” cash flow (AP, Accrued Expenses, Income Tax Payable) Growth Consumes Ca$h! Increasing revenue with controlled expenses will result in increased profits Revenue increases also drive increases in operating assets Cash increases are not as large as profit increases but are delayed because of AR Declining businesses experience opposite effect and can experience increased “cash flow” over profit changes Depreciation Operating Cash Flow Depreciation: Since the company paid cash for the fixed assets when it bought them, the company does not consume cash a second time when it uses them The depreciation of the IE Statement is therefore “added back” for cash flow purposes Purchases of Property, Plant Equipment Fixed Assets to modernize or expand capacity Will be capitalized (depreciated) The Depreciation Story Capital assets are a cash flow out when the asset is bought (Cash Flow/Investing) The bought assets are added to the Property, Plant Equipment line of the Balance Sheet The appropriate depreciation is allocated for in the period that it is “used” on the IE The sum of the accumulated depreciations from the IE is subtracted from the purchase price of the assets