chap007Cash Flow Analysis(财务报表分析,台湾中兴大学)概要1.ppt

Cash Flow Analysis Indirect Method -Net income is adjusted for non-cash income (expense) items and accruals to yield cash flow from operations Direct Method -Each income item is adjusted for its related accruals *Both methods yield identical results-only the presentation format differs. Net Income + Depreciation +/- Gains (losses) on sales of assets +/- Cash generated (used) by current assets liabilities Net cash flows from operating activities Sales - Expenses - Depreciation and amortization expense Net Income + Depreciation expense +/- Gains (losses) on sales of assets +/- Cash generated (used) by current assets and liabilities Net cash flows from operating activities Consider a $100 sale on account In period of sale, net income is increased by $100 but no cash has been generated. Net Income 100 Depreciation and amortization expense 0 Gains (losses) on sale of assets 0 Change in accounts receivable (100) Net Cash flow from operations 0 In period of collection no income is recorded. Net Income 0 Depreciation and amortization expense 0 Gains (losses) on sale of assets 0 Change in accounts receivable 100 Net Cash flow from operations 100 Increase Decrease Assets (Outflow) Inflow Liabilities Inflow (Outflow) 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 * * 7 CHAPTER McGraw-Hill/Irwin ? 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Statement of Cash Flows Relevance of Cash Flows Cash Defined -- refers to cash and cash equivalents. Cash equivalents are short-term, highly liquid investments that are (1) readily convertible to known amounts of cash, and (2) near maturity (typically within 3 months) with limited risk of price changes due to interest rate shifts. Statement of Cash Flows Relevance of Cash Flows Cash is the beginning and