财务管理-测量现金流量课件

CHAPTER17MeasuringCashFlows第17章测量现金流量CHAPTER171KeyTermsIntroducedorEmphasizedinChapter17KeyTerms2Accrualbasis(p.762)Amethodofsummarizingoperatingresultsintermsofrevenueearnedandexpensesincurred,ratherthancashreceiptsorcashpayments.KeyTermsAccrualbasis(p.762)Ameth3应计基础：一种用于汇总经营结果的方法。这种方法以收入的实现和费用的发生、而不是以现金的收入或支出为计量经营结果的依据。KeyTerms应计基础：一种用于汇总经营结果的方法。这种方法以收入的实现42.Cashbasis(p.770)Thepracticeofsummarizingoperatingresultsintermsofcashreceiptsandcashpayments,ratherthanrevenueearnedorexpensesincurred.KeyTerms2.Cashbasis(p.770)Thepra5KeyTerms现金基础：一种用于汇总经营结果的方法。这种方法以现金的收入或的支出、而不是收入的实现和费用的发生为计量经营结果的依据。KeyTerms现金基础：一种用于汇总经营结果的方法。这种63.Cashequivalents(p.765)Highlyliquidshort-terminvestments,suchasTreasurybills,moneymarketfunds,andcommercialpaper.Forpurposesofpreparingastatementofcashflows,moneyheldincashequivalentsisstillviewedas“cash.”Thus,transfersbetweenabankaccountandcashequivalentsarenotconsideredreceiptsordisbursementsofcash.KeyTerms3.Cashequivalents(p.765)H7KeyTerms现金等价物：流动性强的短期投资，比如国库券、金融市场资金和商业汇票。为了编制现金流量表的需要，现金等价物被视为“现金“。因此，在银行帐户和现金等价物之间的调转就不被认为是现金的收入或支付。KeyTerms现金等价物：流动性强的短期投资，比如国库券84.Cashflows(p.762)Atermdescribingbothcashreceipts(inflows)andcashpayments(outflows).KeyTerms4.Cashflows(p.762)Aterm9KeyTerms现金流量：一个用于描述现金收（流入）和现金支付（流出）的词汇。KeyTerms现金流量：一个用于描述现金收（流入）和现金105.Directmethod(p.773)Amethodofreportingnetcashflowfromoperatingactivitiesbylistingspecifictypesofcashinflowsandoutflows.ThisisthemethodrecommendedbytheFASB,buttheindirectmethodisanacceptablealternative.KeyTerms5.Directmethod(p.773)Ame11KeyTerms直接法：一种用于报告经营活动净现金流量的方法。这一方法是通过列示现金流入和流出的具体类型来列示经营现金流量的。FASB推荐使用这种方法，但是间接法也是一种可接受的替代方法。KeyTerms直接法：一种用于报告经营活动净现金流量的方126.Financingactivities(p.764)Transactionssuchasborrowing,repayingborrowedamounts,raisingequitycapital,ormakingdistributiontoowners.Thecasheffectsofthesetransactionsarereportedinthefinancingactivitiessectionofofastatementofcashflows.Noncashaspectsofthesetransactionsaredisclosedinasupplementaryschedule.KeyTerms6.Financingactivities(p.7613KeyTerms筹资活动：是指借款、偿还借款、获得权益资本或是向所有者分配等交易活动。这些交易的现金影响在现金流量表的筹资活动部分报告；非现金影响在一个补充资料中披露。KeyTerms筹资活动：是指借款、偿还借款、获得权益资本147.Freecashflow(p.777)Theportionoftheannualnetcashflowfromoperatingactivitiesthatremainsavailablefordiscretionarypurposes,afterthebasicobligationsofthebusinesshavebeenmet.Canbecomputedinseveraldifferentways.KeyTerms7.Freecashflow(p.777)The15KeyTerms自由现金流量：在经营活动年净现金流量中，企业在满足其经营活动的基本要求后，仍可自由支配的的部分。这一指标可用多种不同的方法计算。KeyTerms自由现金流量：在经营活动年净现金流量中，企168.Indirectmethod(p.774)Aformatofreportingnetcashflowfromoperatingactivitiesthatreconcilesthisfigurewiththeamountofnetincomeshownintheincomestatement.Analternativetothedirectmethod.KeyTerms8.Indirectmethod(p.774)A17KeyTerms间接法：一种报告经营现金净流量的方法。使用间接法是将利润表中的净利润调节为经营活动现金净流量。这是直接法的一个替代方法。KeyTerms间接法：一种报告经营现金净流量的方法。使用189.Investingactivities(p.764)Transactionsinvolvingacquisitionsorsalesofinvestmentsorplantassets.Thecashaspectsofthesetransactionsareshownintheinvestingactivitiessectionofastatementofcashflows.Noncashaspectsofthesetransactionsaredisclosedinasupplementaryscheduletothisfinancialstatement.KeyTerms9.Investingactivities(p.7619KeyTerms投资活动：指涉及取得或销售投资或固定资产的交易。这类交易的现金影响在现金流量表中的投资活动中显示;它们的非现金影响在现金流量表的一个补充资料中披露。KeyTerms投资活动：指涉及取得或销售投资或固定资产的2010.Operatingactivities(p.764)Transactionsenteringintothedeterminationofnetincome,withtheexceptionofgainsandlossesrelatingtofinancingorinvestingactivities.Thecategoryincludessuchtransactionsassellinggoodsorservices,earninginvestmentincome,andincurringcostsandexpenses.Thecasheffectsofthesetransactionsarereflectedintheoperatingactivitiessectionofastatementofcashflows.KeyTerms10.Operatingactivities(p.721KeyTerms经营活动：用于确定除筹资或投资活动产生的收益或损失外的净利润的交易活动。在这类活动中包括销售商品或提供劳务，获得投资收益和成本费用发生等交易活动。这些交易的现金影响在现金流量表中的经营活动部分反映。KeyTerms经营活动：用于确定除筹资或投资活动产生的收22LearningObjectives(1-3)Explainthepurposeandusefulnessofastatementofcashflows.Describehowcashtransactionsareclassifiedwithinastatementofcashflows.Computethemajorcashflowsrelatingtooperatingactivities.LearningObjectives(1-3)Expla23LearningObjectives(4-6)4.Explainwhynetincomediffersfromnetcashflowfromoperatingactivities.5.Distinguishbetweenthedirectandindirectmethodsofreportingoperatingcashflow.6.Computethecashflowsrelatingtoinvestingandfinancingactivities.LearningObjectives(4-6)4.Ex24LearningObjectives(7-9)7.ExplainwhyandhowNoncashinvestingandfinancingactivitiesaredisclosedinastatementofcashflows*8.Computenetcashflowfromoperatingactivitiesusingtheindirectmethod.**9.ExplaintheroleofaworksheetinpreparingastatementofcashflowsLearningObjectives(7-9)7.Exp25LO1:Explainthepurposeandusefulnessofastatementofcashflows.LO1:Explainthepurposeandus26PurposeoftheStatementofCashFlowsThepurpose:

toprovideinformationaboutthecashreceiptsandcashpaymentsofabusinessentityduringtheaccountingperiod.(thebasicpurpose)toprovideinformationaboutalltheinvestingandfinancingactivitiesofthecompanyduringtheperiod.PurposeoftheStatementofCa27Usefulnessofthisstatement(1)Assistinginvestors,creditors,andothersinassessingthefollowingfactors:Thecompany’sabilitytogeneratepositivecashflowsinfutureperiodsThecompany’sabilitytomeetitsobligationsandtopaydividends.Reasonsfordifferencesbetweentheamountofnetincomeandtherelatednetcashflowfromoperatingactivities.Usefulnessofthisstatement(128Usefulnessofthisstatement(2)

Boththecashandnoncashaspectsofthecompany’sinvestmentandfinancingtransactionsfortheperiod.Causesofthechangeintheamountofcashandcashequivalentsbetweenthebeginningandtheendoftheaccountingperiod.Usefulnessofthisstatement(229

ExampleofastatementofcashflowsSeeP763Question:

ComparedwiththestatementofcashflowsofChinainuse,trytopointoutthemajordifferencebetweenthem.

Exampleofastatementofcas30LO2:Describehowcashtransactionsareclassifiedwithinastatementofcashflows.LO2:Describehowcashtransact31ClassificationofCashFlows(1)Operatingactivities:

Cashreceipts:

collectionsfromcustomersforsalesofgoodsandservicesInterestanddividendsreceivedOtherreceiptsfromoperations.Cashpayments:Paymentstosuppliersofmerchandiseandservices,includingpaymentstoemployeesPaymentsofinterestPaymentsofincometaxesOtherexpendituresrelatingtooperations.ClassificationofCashFlows(132ClassificationofCashFlows(2)InvestingactivitiesCashreceipts:Cashproceedsfromsellinginvestmentsorplantassets.CashproceedsfromcollectingprincipalamountsonloansCashpayments:PaymentstoacquireinvestmentsorplantassetsAmountsadvancedtoborrowers.ClassificationofCashFlows(233ClassificationofCashFlows(3)FinancingactivitiesCashreceipts:Proceedsfrombothshort-termandlong-termborrowingCashreceivedfromowners.Cashpayments:Repaymentsofamountsborrowed(excludinginterestpayments)Paymentstoowners,suchasdividends.ClassificationofCashFlows(334NotesfortheClassificationPaymentsofaccruedliabilitiesisclassifiedasoperatingactivities.Thereceiptsandpaymentsofinterestareclassifiedasoperatingactivities.Thereceiptsofdividendsisclassifiedasoperatingactivities,thepaymentsofdividendsisclassifiedasfinancingactivities.Question:whyarereceiptsandpaymentsofinterest“operatingactivities”.NotesfortheClassificationPa35CashandCashEquivalentsCashequivalentsareshort-termhighlyliquidinvestments,suchasmoneymarketfunds,commercialpaper,andTreasurybills.Transfersofmoneybetweenacompany’sbankaccountsandthesecashequivalentsarenotviewedascashreceiptsorcashpayments.Marketablesecuritiesdonotqualifyascashequivalents.CashandCashEquivalentsCash36CriticalimportanceofcashflowfromO.A.Inthelongrun,abusinessmustgenerateapositivenetcashflowfromitsoperatingactivitiesifthebusinessistosurvive.Otherwisethebusinesswillnotbeabletoraisecashfromothersourcesindefinitely.Theabilityofabusinesstoraisecashthroughfinancingactivitiesishighlydependentuponitsabilitytogeneratecashfromitsoperatingactivities.Criticalimportanceofcashfl37TwoapproachestopreparethestatementofcashflowsApproach1:Directlyfromthespecialjournalsforcashreceiptsandcashpayments.Higheraccuracy,lowerefficiencyApproach2:Byexaminingtheincomestatementandthechangesduringtheperiodinallofbalancesheetaccountsexceptforcash.Higherefficiency,loweraccuracyTwoapproachestopreparethe38LO3:Computethemajorcashflowsrelatingtooperatingactivities.

LO3:Computethemajorcashflo39Preparingastatementofcashflows—operatingactivities(1)Cashreceivedfromcustomers=netsales+decreaseinaccountsreceivable(-increaseinaccountsreceivable)Interestreceived=interestrevenue+decreaseininterestreceivable(-increaseininterestreceivable)Dividendsusuallyrecordedoncashbasis.Preparingastatementofcash40Preparingastatementofcashflows—operatingactivities(2)Cashpaymentsforpurchases=costofgoodssold+increaseininventory(-decrease)and+decreaseinaccountspayable(-increase)Cashpaymentsforexpenses=expenses–depreciationandothernoncashexpensesand+increaseinrelatedprepayments(-decrease)and+decreaseinrelatedaccruedliabilities(-increase)Preparingastatementofcash41LO4:Explainwhynetincomediffersfromnetcashflowfromoperatingactivities.

LO4:Explainwhynetincomedi42Differencesbetweennetincomeandnetcashflowfromoperatingactivities

Noncashexpenses,suchasdepreciationexpense.TimingdifferencesbetweennetincomeandnetcashflowfromoperationsNonoperatinggainsandlosses.Differencesbetweennetincome43财务管理-测量现金流量课件44Directmethodandindirectmethod

Directmethod:showsthespecificcashinflowsandoutflowscomprisingtheoperatingactivitiesofthebusiness.Indirectmethod:reconcilesnetincomewiththenetcashflowfromoperatingactivities.Bothmethodsresultinthesamenetcashflowfromoperatingactivities.FASBprefersthedirectmethod,however,theindirectmethodisallowedtobealternatiove.Directmethodandindirectmet45ThegeneralformatofreconcilingthenetincomewithnetcashflowfromoperationsNetincome:Add:Expensesthatdonotrequirecashoutlaysintheperiod;(apportionmentofrelatedcostsornoncashexpenses/accruedexpensesorliabilities)Operatingcashinflowsnotrecordedasrevenueintheperiod;NonoperatinglossesdeductedinthedeterminationofnetincomeLess:Revenuethatdoesnotresultincashinflowsintheperiod.(apportionmentofunearnedrevenue/accruedrevenueorassets)OperatingcashoutflowsnotrecordedasexpenseintheperiodNonoperatinggainsincludedinthedeterminationofnetincomeExample:see778.Thegeneralformatofreconcil46

LO6:Computethecashflowsrelatingtoinvestingandfinancingactivities.

LO6:Computethecashflows47Preparingastatementofcashflows—investingactivitiesMuchinformationaboutinvestingactivitiescanbeobtainedsimplybylookingatthechangesintherelatedassetaccountsduringtheyear.Debitentriesinrelatedassetaccountsrepresentpurchasesofassets,orcashoutlays.creditentriesinrelatedassetaccountsrepresentonlythecost(orbookvalue)oftheassetssold.Todeterminethecashproceedsfromthesesalestransactions,adjustmentsmustbemadeofthegainsorlossesrecognizedonthesales.Preparingastatementofcash48Preparingastatementofcashflows—financingactivitiesCashflowsfromfinancingactivitiesaredeterminedbyanalyzingthedebitandcreditchangesrecodedduringtheperiodintherelatedliabilityandstockholders’equityaccounts.Ingeneralsense,thedebitchangesrepresentcashpayments；thecreditchangesrepresentcashreceipts.Financingactivitiesseldominvolvegainsorlosses,thusthedebitorcreditchangesinthebalancesheetaccountsusuallyareequaltotheamountsoftherelatedcashflows.Note:theearlyretirementofdebtmayresultinagainorloss.Preparingastatementofcash49

LO7:ExplainwhyandhowNoncashinvestingandfinancingactivitiesaredisclosedinastatementofcashflows

LO7:ExplainwhyandhowNonc50whyandhowNoncashinvestingandfinancingactivitiesaredisclosedinastatementofcashflowsOnepurposeofthestatementofcashflowsistoprovideinformationaboutallinvestingandfinancingactivities.Therefore,iftheseactivitieshave“noncash”elements,suchastheissuanceofcapitalstockinexchangeforland,thenoncashexpectsofthetransactionsaredisclosedinasupplementaryschedulethataccompaniesthestatementofcashflows.Illustration:see775whyandhowNoncashinvesting51Relationshipbetweenthestatementofcashflowsandthebalancesheet.Thestatementofcashflowsexplainsinsomedetailthechangesin“Cashandcashequivalents”accountfromonebalancesheetdatetothenext.Relationshipbetweenthestate52Supplementaryscheduleofthisstatement(1)SupplementaryScheduleAillustratesthedeterminationofnetcashflowfromoperatingactivitiesbytheindirectmethod.Thepurposeofthisscheduleistoexplainthedifferencesbetweenthereportednetincomeandthenetcashflowfromoperatingactivities.Supplementaryscheduleofthis53Supplementaryscheduleofthisstatement(2)SupplementaryScheduleBdisclosesany“noncash”aspectsofthecompany’sinvestingandfinancingactivities.Thistypeofsupplementaryscheduleisrequiredwheneversomeaspectsofthecompany’sinvestingandfinancingactivitiesdonotcoincidewithcashflowsoccurringwithinthecurrentperiod.Supplementaryscheduleofthis54Usingthestatementofcashflows(1)Theusersofastatementofcashflowsthenetcashflowfromoperatingactivities.Itshowswhethertheamountislargeenoughtoprovidefornecessaryreplacementsofplantassetsandmaturingliabilities.Andwhetherthereisenoughleftforthecurrentdividendtolooksecure—orevenbeincreased.Usingthestatementofcashfl55Usingthestatementofcashflows(2)Evenmoreimportantthanthenetcashflowfromoperatingactivitiesinanyoneyearisthetrendinthiscashflowoveraperiodofyears—andtheconsistencyofthattrendfromyeartoyear.Thebestresultsareanetcashflowfromoperatingactivitiesthatincreaseseachyearbyasubstantial—butalsopredictable—percentage.Usingthestatementofcashfl56FreecashflowFreecashflowisintendedtorepresentthecashflowavailabletomanagementfordiscretionarypurposes,afterthecompanyhasmetallofitsbasicobligationsrelatingtobusinessoperations.Thereisnowidespreadagreementonwhatarethebasicobligationsrelatingtobusinessoperations.FreecashflowFreecashflowi57Annotatedstatementofcashflows:MCICorporationSee779Annotatedstatementofcashfl58

LO7:Computenetcashflowfromoperatingactivitiesusingtheindirectmethod

LO7:Computenetcashflowfr59ThespecificformatofreconcilingthenetincomewithnetcashflowfromoperationsSee783Thespecificformatofreconci60

LO9:Explaintheroleofaworksheetinpreparingastatementofcashflows

LO9:Explaintheroleofaw61

LO9:Explaintheroleofaworksheetinpreparingastatementofcashflows

LO9:Explaintheroleofaw62Theroleofworksheetinthepreparationofastatementofcashflows

Theworksheetcanformalizeanddocumenttheprocessofpreparingthestatementofcashflows.Theworksheetalsoprovidestheaccountantwithvisualassurancethatthechangesinbalancesheetaccountshavebeenfullyexplained.Illustrationofworksheetusedinthepreparationofstatementofcashflowsbytheindirectmethod:seeP786Theroleofworksheetinthep63ExercisesandproblemsExercise17-2Exercise17-4Exercise17-7Exercise17-8Problem17-1Problem17-2Problem17-4Problem17-5ExercisesandproblemsExercise64CHAPTER17MeasuringCashFlows第17章测量现金流量CHAPTER1765KeyTermsIntroducedorEmphasizedinChapter17KeyTerms66Accrualbasis(p.762)Amethodofsummarizingoperatingresultsintermsofrevenueearnedandexpensesincurred,ratherthancashreceiptsorcashpayments.KeyTermsAccrualbasis(p.762)Ameth67应计基础：一种用于汇总经营结果的方法。这种方法以收入的实现和费用的发生、而不是以现金的收入或支出为计量经营结果的依据。KeyTerms应计基础：一种用于汇总经营结果的方法。这种方法以收入的实现682.Cashbasis(p.770)Thepracticeofsummarizingoperatingresultsintermsofcashreceiptsandcashpayments,ratherthanrevenueearnedorexpensesincurred.KeyTerms2.Cashbasis(p.770)Thepra69KeyTerms现金基础：一种用于汇总经营结果的方法。这种方法以现金的收入或的支出、而不是收入的实现和费用的发生为计量经营结果的依据。KeyTerms现金基础：一种用于汇总经营结果的方法。这种703.Cashequivalents(p.765)Highlyliquidshort-terminvestments,suchasTreasurybills,moneymarketfunds,andcommercialpaper.Forpurposesofpreparingastatementofcashflows,moneyheldincashequivalentsisstillviewedas“cash.”Thus,transfersbetweenabankaccountandcashequivalentsarenotconsideredreceiptsordisbursementsofcash.KeyTerms3.Cashequivalents(p.765)H71KeyTerms现金等价物：流动性强的短期投资，比如国库券、金融市场资金和商业汇票。为了编制现金流量表的需要，现金等价物被视为“现金“。因此，在银行帐户和现金等价物之间的调转就不被认为是现金的收入或支付。KeyTerms现金等价物：流动性强的短期投资，比如国库券724.Cashflows(p.762)Atermdescribingbothcashreceipts(inflows)andcashpayments(outflows).KeyTerms4.Cashflows(p.762)Aterm73KeyTerms现金流量：一个用于描述现金收（流入）和现金支付（流出）的词汇。KeyTerms现金流量：一个用于描述现金收（流入）和现金745.Directmethod(p.773)Amethodofreportingnetcashflowfromoperatingactivitiesbylistingspecifictypesofcashinflowsandoutflows.ThisisthemethodrecommendedbytheFASB,buttheindirectmethodisanacceptablealternative.KeyTerms5.Directmethod(p.773)Ame75KeyTerms直接法：一种用于报告经营活动净现金流量的方法。这一方法是通过列示现金流入和流出的具体类型来列示经营现金流量的。FASB推荐使用这种方法，但是间接法也是一种可接受的替代方法。KeyTerms直接法：一种用于报告经营活动净现金流量的方766.Financingactivities(p.764)Transactionssuchasborrowing,repayingborrowedamounts,raisingequitycapital,ormakingdistributiontoowners.Thecasheffectsofthesetransactionsarereportedinthefinancingactivitiessectionofofastatementofcashflows.Noncashaspectsofthesetransactionsaredisclosedinasupplementaryschedule.KeyTerms6.Financingactivities(p.7677KeyTerms筹资活动：是指借款、偿还借款、获得权益资本或是向所有者分配等交易活动。这些交易的现金影响在现金流量表的筹资活动部分报告；非现金影响在一个补充资料中披露。KeyTerms筹资活动：是指借款、偿还借款、获得权益资本787.Freecashflow(p.777)Theportionoftheannualnetcashflowfromoperatingactivitiesthatremainsavailablefordiscretionarypurposes,afterthebasicobligationsofthebusinesshavebeenmet.Canbecomputedinseveraldifferentways.KeyTerms7.Freecashflow(p.777)The79KeyTerms自由现金流量：在经营活动年净现金流量中，企业在满足其经营活动的基本要求后，仍可自由支配的的部分。这一指标可用多种不同的方法计算。KeyTerms自由现金流量：在经营活动年净现金流量中，企808.Indirectmethod(p.774)Aformatofreportingnetcashflowfromoperatingactivitiesthatreconcilesthisfigurewiththeamountofnetincomeshownintheincomestatement.Analternativetothedirectmethod.KeyTerms8.Indirectmethod(p.774)A81KeyTerms间接法：一种报告经营现金净流量的方法。使用间接法是将利润表中的净利润调节为经营活动现金净流量。这是直接法的一个替代方法。KeyTerms间接法：一种报告经营现金净流量的方法。使用829.Investingactivities(p.764)Transactionsinvolvingacquisitionsorsalesofinvestmentsorplantassets.Thecashaspectsofthesetransactionsareshownintheinvestingactivitiessectionofastatementofcashflows.Noncashaspectsofthesetransactionsaredisclosedinasupplementaryscheduletothisfinancialstatement.KeyTerms9.Investingactivities(p.7683KeyTerms投资活动：指涉及取得或销售投资或固定资产的交易。这类交易的现金影响在现金流量表中的投资活动中显示;它们的非现金影响在现金流量表的一个补充资料中披露。KeyTerms投资活动：指涉及取得或销售投资或固定资产的8410.Operatingactivities(p.764)Transactionsenteringintothedeterminationofnetincome,withtheexceptionofgainsandlossesrelatingtofinancingorinvestingactivities.Thecategoryincludessuchtransactionsassellinggoodsorservices,earninginvestmentincome,andincurringcostsandexpenses.Thecasheffectsofthesetransactionsarereflectedintheoperatingactivitiessectionofastatementofcashflows.KeyTerms10.Operatingactivities(p.785KeyTerms经营活动：用于确定除筹资或投资活动产生的收益或损失外的净利润的交易活动。在这类活动中包括销售商品或提供劳务，获得投资收益和成本费用发生等交易活动。这些交易的现金影响在现金流量表中的经营活动部分反映。KeyTerms经营活动：用于确定除筹资或投资活动产生的收86LearningObjectives(1-3)Explainthepurposeandusefulnessofastatementofcashflows.Describehowcashtransactionsareclassifiedwithinastatementofcashflows.Computethemajorcashflowsrelatingtooperatingactivities.LearningObjectives(1-3)Expla87LearningObjectives(4-6)4.Explainwhynetincomediffersfromnetcashflowfromoperatingactivities.5.Distinguishbetweenthedirectandindirectmethodsofreportingoperatingcashflow.6.Computethecashflowsrelatingtoinvestingandfinancingactivities.LearningObjectives(4-6)4.Ex88LearningObjectives(7-9)7.ExplainwhyandhowNoncashinvestingandfinancingactivitiesaredisclosedinastatementofcashflows*8.Computenetcashflowfromoperatingactivitiesusingtheindirectmethod.**9.ExplaintheroleofaworksheetinpreparingastatementofcashflowsLearningObjectives(7-9)7.Exp89LO1:Explainthepurposeandusefulnessofastatementofcashflows.LO1:Explainthepurposeandus90PurposeoftheStatementofCashFlowsThepurpose:

toprovideinformationaboutthecashreceiptsandcashpaymentsofabusinessentityduringtheaccountingperiod.(thebasicpurpose)toprovideinformationaboutalltheinvestingandfinancingactivitiesofthecompanyduringtheperiod.PurposeoftheStatementofCa91Usefulnessofthisstatement(1)Assistinginvestors,creditors,andothersinassessingthefollowingfactors:Thecompany’sabilitytogeneratepositivecashflowsinfutureperiodsThecompany’sabilitytomeetitsobligationsandtopaydividends.Reasonsfordifferencesbetweentheamountofnetincomeandtherelatednetcashflowfromoperatingactivities.Usefulnessofthisstatement(192Usefulnessofthisstatement(2)

Boththecashandnoncashaspectsofthecompany’sinvestmentandfinancingtransactionsfortheperiod.Causesofthechangeintheamountofcashandcashequivalentsbetweenthebeginningandtheendoftheaccountingperiod.Usefulnessofthisstatement(293

ExampleofastatementofcashflowsSeeP763Question:

ComparedwiththestatementofcashflowsofChinainuse,trytopointoutthemajordifferencebetweenthem.

Exampleofastatementofcas94LO2:Describehowcashtransactionsareclassifiedwithinastatementofcashflows.LO2:Describehowcashtransact95ClassificationofCashFlows(1)Operatingactivities:

Cashreceipts:

collectionsfromcustomersforsalesofgoodsandservicesInterestanddividendsreceivedOtherreceiptsfromoperations.Cashpayments:Paymentstosuppliersofmerchandiseandservices,includingpaymentstoemployeesPaymentsofinterestPaymentsofincometaxesOtherexpendituresrelatingtooperations.ClassificationofCashFlows(196ClassificationofCashFlows(2)InvestingactivitiesCashreceipts:Cashproceedsfromsellinginvestmentsorplantassets.CashproceedsfromcollectingprincipalamountsonloansCashpayments:PaymentstoacquireinvestmentsorplantassetsAmountsadvancedtoborrowers.ClassificationofCashFlows(297ClassificationofCashFlows(3)FinancingactivitiesCashreceipts:Proceedsfrombothshort-termandlong-termborrowingCashreceivedfromowners.Cashpayments:Repaymentsofamountsborrowed(excludinginterestpayments)Paymentstoowners,suchasdividends.ClassificationofCashFlows(398NotesfortheClassificationPaymentsofaccruedliabilitiesisclassifiedasoperatingactivities.Thereceiptsandpaymentsofinterestareclassifiedasoperatingactivities.Thereceiptsofdividendsisclassifiedasoperatingactivities,thepaymentsofdividendsisclassifiedasfinancingactivities.Question:whyarereceiptsandpaymentsofinterest“operatingactivities”.NotesfortheClassificationPa99CashandCashEquivalentsCashequivalentsareshort-termhighlyliquidinvestments,suchasmoneymarketfunds,commercialpaper,andTreasurybills.Transfersofmoneybetweenacompany’sbankaccountsandthesecashequivalentsarenotviewedascashreceiptsorcashpayments.Marketablesecuritiesdonotqualifyascashequivalents.CashandCashEquivalentsCash100CriticalimportanceofcashflowfromO.A.Inthelongrun,abusinessmustgenerateapositivenetcashflowfromitsoperatingactivitiesifthebusinessistosurvive.Otherwisethebusinesswillnotbeabletoraisecashfromothersourcesindefinitely.Theabilityofabusinesstoraisecashthroughfinancingactivitiesishighlydependentuponitsabilitytogeneratecashfromitsoperatingactivities.Criticalimportanceofcashfl101TwoapproachestopreparethestatementofcashflowsApproach1:Directlyfromthespecialjournalsforcashreceiptsandcashpayments.Higheraccuracy,lowerefficiencyApproach2:Byexaminingtheincomestatementandthechangesduringtheperiodinallofbalancesheetaccountsexceptforcash.Higherefficiency,loweraccuracyTwoapproachestopreparethe102LO3:Computethemajorcashflowsrelatingtooperatingactivities.

LO3:Computethemajorcashflo103Preparingastatementofcashflows—operatingactivities(1)Cashreceivedfromcustomers=netsales+decreaseinaccountsreceivable(-increaseinaccountsreceivable)Interestreceived=interestrevenue+decreaseininterestreceivable(-increaseininterestreceivable)Dividendsusuallyrecordedoncashbasis.Preparingastatementofcash104Preparingastatementofcashflows—operatingactivities(2)Cashpaymentsforpurchases=costofgoodssold+increaseininventory(-decrease)and+decreaseinaccountspayable(-increase)Cashpaymentsforexpenses=expenses–depreciationandoth