银行会计学(英文版)

LearningObjectives1. DefinitionsofSixBasicAccountingTerms2. DoubleEntrySystem3. BalanceSheet4. TrialBalance5. TradingandProfitandLossAccount6. JournalEntriesPowerNotesApproachingtheSubjectofAccounting(1)Chapter

1C1LearningObjectives1. UsefulnessofanAccount2. CharacteristicsofanAccount3. AnalyzingandSummarizingTransactions4. IllustrationofAnalyzingandSummarizing5. TrialBalance6. DiscoveryandCorrectionofErrors7. FinancialAnalysisandInterpretationPowerNotesAnalyzingTransactionsChapterF2C2LearningObjectivesPowerNotesTheMatchingConceptandtheAdjustingProcess1.TheMatchingConcept2.NatureoftheAdjustingProcess3.RecordingAdjustingEntries4.SummaryofAdjustmentProcess5. FinancialAnalysisandInterpretationChapter

F3C3LearningObjectivesPowerNotes

CompletingtheAccountingCycle1. WorkSheet2. FinancialStatements3. AdjustingandClosingEntries4. AccountingCycle5. FiscalYear6. FinancialAnalysisandInterpretationChapterF4C4LearningObjectivesPowerNotes1.NatureofMerchandisingBusiness2a.AccountingforPurchases2b.AccountingforSales2c.TransportationCosts2d. MerchandiseTransactions3. MerchandisingChartofAccounts4. MerchandisingIncomeStatement5. MerchandisingAccountingCycle6. FinancialAnalysisandInterpretationChapter

F5AccountingforMerchandisingBusinessesC5LearningObjectivesPowerNotes 1. BasicAccountingSystems 2. InternalControl 3. ControlsOverCash 4. InternalControlofCashReceipts 5. InternalControlofCashPayments 6. BankAccounts:ACashControl 7. BankReconciliation8. PettyCash 9. BalanceSheetCashPresentation 10. FinancialAnalysisandInterpretationChapter

F6AccountingSystems,InternalControls,andCashC6LearningObjectivesPowerNotes1. ClassificationofReceivables2. InternalControlofReceivables3. UncollectibleReceivables4. Uncollectibles–AllowanceMethod5. Uncollectibles–DirectWrite-OffMethod6. CharacteristicsofNotesReceivable7. AccountingforNotesReceivable8. BalanceSheetPresentation9. FinancialAnalysisandInterpretationChapter

F7C7ReceivablesLearningObjectivesPowerNotes1. InternalControlofInventories2. EffectofInventoryErrors3. InventoryCostFlowAssumptions4. PerpetualInventoryCostingMethods5. PeriodicInventoryCostingMethods6. ComparingInventoryCostingMethods7. InventoryValuationOtherThanCost8. BalanceSheetPresentationofMerchandise9. EstimatingInventoryCost10.FinancialAnalysisandInterpretationChapter

F8InventoriesC8LearningObjectivesPowerNotes 1. NatureofFixedAssets 2. AccountingforDepreciation 3. CapitalandRevenueExpenditures 4. DisposalofFixedAssets 5. LeasingFixedAssets 6. InternalControlofFixedAssets 7. NaturalResources 8. IntangibleAssets 9. FinancialReporting 10. FinancialAnalysisandInterpretationChapter

F9FixedAssetsandIntangibleAssetsC9LearningObjectivesPowerNotes1. TheNatureofCurrentLiabilities2. Short-TermNotesPayable3. ContingentLiabilities4. PayrollandPayrollTaxes5. AccountingSystemsforPayroll6. Employees’FringeBenefits7. FinancialAnalysisandInterpretationChapter

F10CurrentLiabilitiesC10LearningObjectivesPowerNotes1.NatureofaCorporation2.Stockholders’Equity3.SourcesofPaid-inCapital4.IssuingStock5.TreasuryStockTransactions6.StockSplits7.AccountingforDividends8.FinancialAnalysisandInterpretationChapterF11C11Corporations:Organization,CapitalStock,DividendsLearningObjectivesPowerNotes1. CorporateIncomeTaxes2. UnusualIncomeStatementItems3. EarningsPerCommonShare4. ReportingStockholders’Equity5. ComprehensiveIncome6. AccountingforInvestmentinStocks7. BusinessCombinations8. FinancialAnalysisandInterpretationChapterF12C12Corporations:IncomeandTaxes,Stockholders’Equity,InvestmentsinStocksLearningObjectivesPowerNotes1. FinancingCorporations2. CharacteristicsofBondsPayable3. ThePresent-ValueConceptandBondsPayable4. AccountingforBondsPayable5. BondSinkingFunds6. BondRedemption7. InvestmentsinBonds8. CorporationBalanceSheet9. FinancialAnalysisandInterpretationChapterF13C13BondsPayableandInvestmentsinBondsLearningObjectivesPowerNotes1. PurposeoftheStatementofCashFlows2. ReportingCashFlows3. StatementofCashFlows–TheIndirectMethod4. StatementofCashFlows–TheDirectMethod5. FinancialAnalysisandInterpretationChapterF14C14StatementofCashFlowsLearningObjectivesPowerNotes1. BasicAnalyticalProcedures2. SolvencyAnalysis3. ProfitabilityAnalysis4. SummaryofAnalyticalMeasures5. CorporateAnnualReportsC15

FinancialStatementAnalysisChapterF15

HorizontalandVerticalAnalysisSolvencyAnalysisProfitabilityAnalysisAnnualReportsSlide# PowerNoteTopics

Note:Toselectatopic,typetheslide#andpressEnter. 3 10 28 43PowerNotes

FinancialStatementAnalysisChapterF15LincolnCompany

ComparativeBalanceSheet

December31,2003and2002

Assets

Currentassets $550,000 $533,000 $17,000 3.2%Long-terminvestments 95,000 177,500 (82,500) (46.5%)Fixedassets(net) 444,500 470,000 (25,500) (5.4%)Intangibleassets 50,000 50,000 — $1,139,500 $1,230,500 $(91,000) (7.4%)

LiabilitiesCurrentliabilities $210,000 $243,000 $(33,000) (13.6%)Long-termliabilities 100,000 200,000 (100,000) (50.0%) $310,000 $443,000 $(133,000) (30.0%)

Stockholders’EquityPreferredstock,$100par $150,000 $150,000 —Commonstock,$10par 500,000 500,000 —Retainedearnings 179,500 137,500 $42,000 30.5% $829,500 $787,500 $42,000 5.3% $1,139,500 $1230,500 $(91,000) (7.4%)

Increase(Decrease)

2003 2002 Amount PercentLincolnCompany

ComparativeBalanceSheet

December31,2003and2002

Assets

Currentassets $550,000 $533,000 $17,000 3.2%Long-terminvestments 95,000 177,500 (82,500) (46.5%)Fixedassets(net) 444,500 470,000 (25,500) (5.4%)Intangibleassets 50,000 50,000 — $1,139,500 $1,230,500 $(91,000) (7.4%)

LiabilitiesCurrentliabilities $210,000 $243,000 $(33,000) (13.6%)Long-termliabilities 100,000 200,000 (100,000) (50.0%) $310,000 $443,000 $(133,000) (30.0%)

Stockholders’EquityPreferredstock,$100par $150,000 $150,000 —Commonstock,$10par 500,000 500,000 —Retainedearnings 179,500 137,500 $42,000 30.5% $829,500 $787,500 $42,000 5.3% $1,139,500 $1230,500 $(91,000) (7.4%)

Increase(Decrease)

2003 2002 Amount Percent

HorizontalAnalysis:Currentyear(2003) $550,000Baseyear(2002) $533,000=103.2%Increaseamount $17,000Baseyear(2002) $533,000=3.2%LincolnCompany

ComparativeIncomeStatement

December31,2003and2002Sales $1,530,500 $1,234,000 $296,500 24.0%Salesreturns 32,500 34,000 (1,500) (4.4%)Netsales $1,498,000 $1,200,000 $298,000) 24.8%Costofgoodssold 1,043,000 820,000 223,000 27.2%Grossprofit $455,000 $380,000 $75,000 19.7%Sellingexpenses $191,000 $147,000 $44,000 29.9%Administrativeexpenses 104,000 97,400 6,600 6.8%Totaloperatingexpenses $295,000 $244,400 $50,600 20.7%Operatingincome $160,000 $135,600 $24,400 18.0%Otherincome 8,500 11,000 (2,500) (22.7%) $168,500 $146,600 $21,900 14.9%Otherexpense 6,000 12,000 (6,000) (50.0%)Incomebeforeincometax $162,500 $134,600 $27,900 20.7%Incometax 71,500 58,100 13,400 23.1%Netincome $91,000 $76,500 $14,500 19.0%

Increase(Decrease)

2003 2002 Amount PercentLincolnCompany

ComparativeIncomeStatement

December31,2003and2002Sales $1,530,500 $1,234,000 $296,500 24.0%Salesreturns 32,500 34,000 (1,500) (4.4%)Netsales $1,498,000 $1,200,000 $298,000) 24.8%Costofgoodssold 1,043,000 820,000 223,000 27.2%Grossprofit $455,000 $380,000 $75,000 19.7%Sellingexpenses $191,000 $147,000 $44,000 29.9%Administrativeexpenses 104,000 97,400 6,600 6.8%Totaloperatingexpenses $295,000 $244,400 $50,600 20.7%Operatingincome $160,000 $135,600 $24,400 18.0%Otherincome 8,500 11,000 (2,500) (22.7%) $168,500 $146,600 $21,900 14.9%Otherexpense 6,000 12,000 (6,000) (50.0%)Incomebeforeincometax $162,500 $134,600 $27,900 20.7%Incometax 71,500 58,100 13,400 23.1%Netincome $91,000 $76,500 $14,500 19.0%

Increase(Decrease)

2003 2002 Amount Percent

HorizontalAnalysis:Currentyear(2003) $1,498,000Baseyear(2002) $1,200,000=124.8%Increaseamount $298,000Baseyear(2002) $1,200,000=24.8%LincolnCompany

ComparativeBalanceSheets

Assets

Currentassets $550,000 48.3% $533,000 43.3%Long-terminvestments 95,000 8.3 177,500 14.4Fixedassets(net) 444,500 39.0 470,000 38.2Intangibleassets 50,000 4.4 50,000 4.1 $1,139,500 100.0% $1,230,500 100.0%

LiabilitiesCurrentliabilities $210,000 18.4% $243,000 19.7%Long-termliabilities 100,000 8.8 200,000 16.3

$310,000 27.2% $443,000 36.0%

Stockholders’EquityPreferredstock,$100par $150,000 13.2% $150,000 12.2%Commonstock,$10par 500,000 43.9 500,000 40.6 Retainedearnings 179,500 15.7 137,500 11.2 $829,500 72.8% $787,500 64.0% $1,139,500 100.0% $1230,500 100.0%

December31,2003December31,2002Amount Percent Amount PercentLincolnCompany

ComparativeBalanceSheets

Assets

Currentassets $550,000 48.3% $533,000 43.3%Long-terminvestments 95,000 8.3 177,500 14.4Fixedassets(net) 444,500 39.0 470,000 38.2Intangibleassets 50,000 4.4 50,000 4.1 $1,139,500 100.0% $1,230,500 100.0%

LiabilitiesCurrentliabilities $210,000 18.4% $243,000 19.7%Long-termliabilities 100,000 8.8 200,000 16.3

$310,000 27.2% $443,000 36.0%

Stockholders’EquityPreferredstock,$100par $150,000 13.2% $150,000 12.2%Commonstock,$10par 500,000 43.9 500,000 40.6 Retainedearnings 179,500 15.7 137,500 11.2 $829,500 72.8% $787,500 64.0% $1,139,500 100.0% $1230,500 100.0%

December31,2003December31,2002Amount Percent Amount Percent

VerticalAnalysis:Currentliabilities $210,000Totalassets $1,139,500=18.4%LincolnCompany

ComparativeBalanceSheets

Assets

Currentassets $550,000 48.3% $533,000 43.3%Long-terminvestments 95,000 8.3 177,500 14.4Fixedassets(net) 444,500 39.0 470,000 38.2Intangibleassets 50,000 4.4 50,000 4.1 $1,139,500 100.0% $1,230,500 100.0%

LiabilitiesCurrentliabilities $210,000 18.4% $243,000 19.7%Long-termliabilities 100,000 8.8 200,000 16.3

$310,000 27.2% $443,000 36.0%

Stockholders’EquityPreferredstock,$100par $150,000 13.2% $150,000 12.2%Commonstock,$10par 500,000 43.9 500,000 40.6 Retainedearnings 179,500 15.7 137,500 11.2 $829,500 72.8% $787,500 64.0% $1,139,500 100.0% $1230,500 100.0%

December31,2003December31,2002Amount Percent Amount PercentCommon-SizeStatementsSolvencyAnalysisSolvencyistheabilityofabusinesstomeetitsfinancialobligations(debts)astheyaredue.Solvencyanalysisfocusesontheabilityofabusinesstopayorotherwisesatisfyitscurrent

and

noncurrentliabilities.Thisabilityisnormallyassessedbyexaminingbalancesheet

relationships.SolvencyMeasures—TheShort-TermCreditorCurrentassets $550,000 $533,000Currentliabilities 210,000 243,000WorkingCapitalandCurrentRatio 2003 2002SolvencyMeasures—TheShort-TermCreditorWorkingCapitalandCurrentRatioUse: Toindicatetheabilitytomeetcurrentlymaturingobligations. 2003 2002Currentassets $550,000 $533,000Currentliabilities 210,000 243,000Workingcapital $340,000 $290,000SolvencyMeasures—TheShort-TermCreditorCurrentassets $550,000 $533,000Currentliabilities 210,000 243,000Workingcapital $340,000 $290,000Currentratio 2.6 2.2WorkingCapitalandCurrentRatioUse: Toindicatetheabilitytomeetcurrentlymaturingobligations.Dividecurrentassetsbycurrentliabilities 2003 2002SolvencyMeasures—TheShort-TermCreditorQuickassets: Cash $90,500 $64,700 Marketablesecurities 75,000 60,000 Accountsreceivable(net) 115,000 120,000 Total $280,500 $244,700Currentliabilities $210,000 $243,000Acid-TestRatio 2003 2002SolvencyMeasures—TheShort-TermCreditorAcid-TestRatioUse: Toindicateinstantdebt-payingability. 2003 2002Quickassets: Cash $90,500 $64,700 Marketablesecurities 75,000 60,000 Accountsreceivable(net) 115,000 120,000 Total $280,500 $244,700Currentliabilities $210,000 $243,000Acid-testratio 1.3 1.0SolvencyMeasures—TheShort-TermCreditorAccountsReceivableTurnoverNetsalesonaccount $1,498,000 $1,200,000Accountsreceivable(net): Beginningofyear $120,000 $140,000 Endofyear 115,000 120,000 Total $235,000 $260,000 Average $117,500 $130,000

2003 2002SolvencyMeasures—TheShort-TermCreditorAccountsReceivableTurnoverUse: Toassesstheefficiencyincollectingreceivablesandinthemanagementofcredit.Netsalesonaccount $1,498,000 $1,200,000Accountsreceivable(net): Beginningofyear $120,000 $140,000 Endofyear 115,500 120,000 Total $235,000 $260,000 Average $117,500 $130,000Accts.receivableturnover 12.7 9.2 2003 2002SolvencyMeasures—TheShort-TermCreditorNumberofDays’SalesinReceivablesUse: Toassesstheefficiencyincollectingreceivablesandinthemanagementofcredit. 2003 2002Accountsreceivable(net) endofyear $115,000 $120,000Netsalesonaccount $1,498,000 $1,200,000Averagedailysaleson onaccount(sales

365) $4,104 $3,288

Numberofdays’salesin receivables 28 36.5 SolvencyMeasures—TheShort-TermCreditorInventoryTurnover 2003 2002Costofgoodssold $1,043,000 $820,000Inventories: Beginningofyear $283,000 $311,000 Endofyear 264,000 283,000 Total $547,000 $594,000 Average $273,500 $297,000

SolvencyMeasures—TheShort-TermCreditorInventoryTurnoverUse: Toassesstheefficiencyinthemanagementofinventory. 2003 2002Costofgoodssold $1,043,000 $820,000Inventories: Beginningofyear $283,000 $311,000 Endofyear 264,000 283,000 Total $547,000 $594,000 Average $273,500 $297,000Inventoryturnover 3.8 2.8SolvencyMeasures—TheShort-TermCreditorNumberofDays’SalesinInventoryUse: Toassesstheefficiencyinthemanagementofinventory. 2003 2002Inventories,endofyear $264,000 $283,000Costofgoodssold $1,043,000 $820,000Averagedailycostof goodssold (COGS

365) $2,858 $2,247Numberofdays’sales ininventory 92.4 125.9 SolvencyMeasures—TheLong-TermCreditorRatioofPlantAssetstoLong-TermLiabilitiesFixedassets(net) $444,500 $470,000Long-termliabilities $100,000 $200,000

2003 2002SolvencyMeasures—TheLong-TermCreditorUse: Toindicatethemarginofsafetytolong-termcreditors. 2003 2002Fixedassets(net) $444,500 $470,000Long-termliabilities $100,000 $200,000Ratiooffixedassetsto long-termliabilities 4.4 2.4 RatioofFixedAssetstoLong-TermLiabilitiesSolvencyMeasures—TheLong-TermCreditorRatioofLiabilitiestoStockholders’Equity 2003 2002Totalliabilities $310,000 $443,000Totalstockholders’equity $829,500 $787,500

SolvencyMeasures—TheLong-TermCreditorRatioofLiabilitiestoStockholders’EquityUse: Toindicatethemarginofsafetytocreditors. 2003 2002Totalliabilities $310,000 $443,000Totalstockholders’equity $829,500 $787,500Ratioofliabilitiesto stockholders’equity 0.37 0.56 SolvencyMeasures—TheLong-TermCreditorNumberofTimesInterestChargesEarned 2003 2002Incomebeforeincometax $900,000 $800,000Addinterestexpense 300,000 250,000Amountavailableforinterest $1,200,000 $1,050,000

SolvencyMeasures—TheLong-TermCreditorNumberofTimesInterestChargesEarnedUse: Toassesstherisktodebtholdersintermsofnumberoftimesinterestchargeswereearned. 2003 2002Incomebeforeincometax $900,000 $800,000Addinterestexpense 300,000 250,000Amountavailableforinterest $1,200,000 $1,050,000Numberoftimesearned 4.0 4.2 ProfitabilityAnalysisProfitabilityistheabilityofanentitytoearnprofits.Thisabilitytoearnprofitsdependsontheeffectivenessandefficiencyofoperations

aswellasresourcesavailable.Profitabilityanalysis

focusesprimarilyontherelationshipbetweenoperatingresultsreportedintheincomestatement

andresourcesreportedinthebalancesheet.ProfitabilityMeasures—TheCommonStockholderRatioofNetSalestoAssets 2003 2002Netsales $1,498,000 $1,200,000Totalassets: Beginningofyear $1,053,000 $1,010,000 Endofyear 1,044,500 1,053,000 Total $2,097,500 $2,063,000 Average $1,048,750 $1,031,500

Excludeslong-terminvestmentsProfitabilityMeasures—TheCommonStockholderRatioofNetSalestoAssetsUse: Toassesstheeffectivenessoftheuseofassets. 2003 2002Netsalesonaccount $1,498,000 $1,200,000Totalassets: Beginningofyear $1,053,000 $1,010,000 Endofyear 1,044,500 1,053,000 Total $2,097,500 $2,063,000 Average $1,048,750 $1,031,500Ratioofnetsalestoassets 1.4 1.2 ProfitabilityMeasures—TheCommonStockholderRateEarnedonTotalAssets 2003 2002Netincome $91,000 $76,500Plusinterestexpense 6,000 12,000 Total $97,000 $88,500Totalassets: Beginningofyear $1,230,500 $1,187,500 Endofyear 1,139,500 1,230,500 Total $2,370,000 $2,418,000 Average $1,185,000 $1,209,000

ProfitabilityMeasures—TheCommonStockholderRateEarnedonTotalAssetsUse: Toassesstheprofitabilityoftheassets. 2003 2002Netincome $91,000 $76,500Plusinterestexpense 6,000 12,000 Total $97,000 $88,500Totalassets: Beginningofyear $1,230,500 $1,187,500 Endofyear 1,139,500 1,230,500 Total $2,370,000 $2,418,000 Average $1,185,000 $1,209,000Rateearnedontotalassets 8.2% 7.3% ProfitabilityMeasures—TheCommonStockholderRateEarnedonStockholders’Equity 2003 2002Netincome $91,000 $76,500Stockholders’equity: Beginningofyear $787,500 $750,000 Endofyear 829,500 787,500 Total $1,617,000 $1,537,500 Average $808,500 $768,750

ProfitabilityMeasures—TheCommonStockholderRateEarnedonStockholders’EquityUse: Toassesstheprofitabilityoftheinvestmentbystockholders.Netincome $91,000 $76,500Stockholders’equity: Beginningofyear $787,500 $750,000 Endofyear 829,500 787,500 Total $1,617,000 $1,537,500 Average $808,500 $768,750Rateearnedonequity 11.3% 10.0% 2003 2002ProfitabilityMeasures—TheCommonStockholderRateEarnedonCommonStockholders’Equity 2003 2002Netincome $91,000 $76,500Lesspreferreddividends 9,000 9,000Remainder—commonstock $82,000 $67,500Commonstockholders’equity: Beginningofyear $637,500 $600,000 Endofyear 679,500 637,500 Total $1,317,000 $1,237,500 Average $658,500 $618,750

ProfitabilityMeasures—TheCommonStockholderRateEarnedonCommonStockholders’EquityUse: Toassesstheprofitabilityoftheinvestmentbycommonstockholders. 2003 2002Netincome $91,000 $76,500Lesspreferreddividends 9,000 9,000Remainder—commonstock $82,000 $67,500Commonstockholders’equity: Beginningofyear $637,500 $600,000 Endofyear 679,500 637,500 Total $1,317,000 $1,237,500 Average $658,500 $618,750Rateearnedoncommonequity 12.5% 10.9% ProfitabilityMeasures—TheCommonStockholderEarningsPerShareonCommonStock 2003 2002Netincome $91,000 $76,500Lesspreferreddividends 9,000 9,000Remainder—commonstock $82,000 $67,500Sharesofcommonstock 50,000 50,000

ProfitabilityMeasures—TheCommonStockholderEarningsPerShareonCommonStock 2003 2002Netincome $91,000 $76,500Lesspreferreddividends 9,000 9,000Remainder—commonstock $82,000 $67,500Sharesofcommonstock 50,000 50,000Earningspershareoncommon $1.64 $1.35 Use: Toassesstheprofitabilityoftheinvestmentbycommonstockholders.ProfitabilityMeasures—TheCommonStockholderPrice-EarningsRatio 2003 2002Marketpricepershareofcommon $20.50 $13.50Earningspershareoncommon $1.64 $1.35

ProfitabilityMeasures—TheCommonStockholderPrice-EarningsRatioUse: Toindicatefutureearningsprospects,basedontherelationshipbetweenmarketvalueofcommonstockandearnings. 2003 2002Marketpricepershareofcommon $20.50 $13.50Earningspershareoncommon $1.64 $1.35Price-earningsratiooncommon 12.5 10.0 ProfitabilityMeasures—TheCommonStockholderDividendYield 2003 2002Dividendspershareofcommon $0.80 $0.60Marketpricepershareofcommon $20.50 $13.50

ProfitabilityMeasures—TheCommonStockholderDividendYieldUse: Toindicatetherateofreturntocommonstockholdersintermsofdividends. 2003 2002Dividendspershareofcommon $0.80 $0.60Marketpricepershareofcommon $20.50 $13.50Dividendyieldoncommonstock 3.9% 4.4% CorporateAnnualReports1. FinancialHighlights2. President’sLettertotheStockholders3. ManagementReport4. IndependentAuditors’Report5. HistoricalSummaryInadditiontofinancialstatements,theannualreport

includes:

Note:Toseethetopicslide,type2andpressEnter.ThisisthelastslideinChapterF15PowerNotes

FinancialStatementAnalysisChapterF15CashFlowBasicsStatementofCashFlows–TwoMethodsChangesinCurrentAccountsStatementofCashFlows–IndirectMethodStatementofCashFlows–DirectMethodFreeCashFlowSlide# PowerNoteTopics 3 20 31 34 39 62Note:Toselectatopic,typetheslide#andpressEnter.PowerNotesChapterF14StatementofCashFlowsReportingCashFlows1. Operatingactivities–transactionsthataffectnetincome.2. Investingactivities–transactionsthataffectnoncurrentassets.3. Financingactivities–transactionsthataffectequityanddebtoftheentity.Thestatementofcashflows

reportsafirm’smajorcashinflowsandoutflowsforaperiod.Cashflowsarereportedbythreetypesofactivities.CashFlowsIncreasesinCashDecreasesinCashCashCashFlowsIncreasesinCash(receiptsfromrevenues)DecreasesinCashOperatingCashCashFlowsIncreasesinCash(receiptsfromrevenues)(paymentsforexpenses)DecreasesinCashOperatingOperatingCashCashFlowsIncreasesinCash(receiptsfromrevenues)(paymentsforexpenses)(receiptsfromsalesofnoncurrentassets)DecreasesinCashOperatingInvestingOperatingCashCashFlowsIncreasesinCash(receiptsfromrevenues)(paymentsforexpenses)(receiptsfromsalesofnoncurrentassets)(paymentsforaquiringnoncurrentassets)DecreasesinCashOperatingInvestingOperatingInvestingCashCashFlowsIncreasesinCash(receiptsfromrevenues)(paymentsforexpenses)(receiptsfromsalesofnoncurrentassets)(receiptsfromissuingequityanddebtsecurities)(paymentsforaquiringnoncurrentassets)DecreasesinCashOperatingInvestingFinancingOperatingInvestingCashCashFlowsIncreasesinCash(receiptsfromrevenues)(paymentsfordividends,andredemptionofdebtsecurities)(paymentsforexpenses)(receiptsfromsalesofnoncurrentassets)(receiptsfromissuingequityanddebtsecurities)(paymentsforaquiringnoncurrentassets)DecreasesinCashOperatingInvestingFinancingOperatingInvestingFinancingCashCashFlows–OperatingActivitiesTypicalcashinflowsTypicalcashoutflowsWhataresomeofthetypicalcashinflowsfromoperatingactivities?CashFlows–OperatingActivitiesTypicalcashinflowsTypicalcashoutflowsInterestRevenueSalesofgoodsandservicesDividendRevenueWhataresomeofthetypicalcashoutflowsfromoperatingactivities?CashFlows–OperatingActivitiesTypicalcashinflowsTypicalcashoutflowsSalesofgoodsandservicesMerchandisepurchasesPaymentsofwages&otherexpensesTaxpaymentsInterestRevenueDividendRevenueCashFlows–InvestingActivitiesTypicalcashinflowsTypicalcashoutflowsWhataresomeofthetypicalcashinflowsfrominvestingactivities?CashFlows–InvestingActivitiesTypicalcashinflowsTypicalcashoutflowsSalesoffixedassetsandotherlong-terminvestmentsSaleofmarketablesecuritiesandinvestmentsWhataresomeofthetypicalcashoutflowsfrominvestingactivities?CashFlows–InvestingActivitiesTypicalcashinflowsTypicalcashoutflowsSalesoffixedassetsandotherlong-terminvestmentsSaleofmarketablesecuritiesandinvestmentsPurchaseoffixedassetsandotherlong-terminvestmentsPurchaseofmarketablesecuritiesandinvestmentsCashFlows–FinancingActivitiesTypicalcashinflowsTypicalcashoutflowsWhataresomeofthetypicalcashinflowsfromfinancingactivities?CashFlows–FinancingActivitiesTypicalcashinflowsTypicalcashoutflowsSales(issuance)ofstockSale(issuance)ofbondsandothermoneymarketdebtBorrowingfrombanksandotherlendinginstitutionsWhataresomeofthetypicalcashoutflowsfromfinancingactivities?CashFlows–FinancingActivitiesTypicalcashinflowsTypicalcashoutflowsSales(issuance)ofstockSale(issuance)ofbondsandothermoneymarketdebtPurchaseoftreasurystockRepaymentandredemptionofdebt(bonds,notes,other)PaymentofcashdividendsBorrowingfrombanksandotherlendinginstitutionsStatementofCashFlows1. Generatecashflowfromoperations.2. Maintainandexpandoperatingcapacity.3. Paydividends.4. Paydebts,includinginterest,whendue.5. Generatefutureprofits.Theprimaryattentionistheflowofcashratherthannetincome.Thestatementofcashflows

isinvaluableinassessingthecapacityofafirmtoachievegoalssuchas:PreparingtheStatementofCashFlowsNetcashflowsfromoperatingactivities

willbethedifferencebetweentheoperatingcashreceipts

andoperatingcashpayments.Netcashflowsfromoperatingactivities

isdeterminedbyadjustingtheaccrualnetincome

fromoperationstoreflectacash-basednetincome

fromoperations.DirectMethodIndirectMethodAdva