Bài giảng Financial Accounting - Chapter 11: Statement of Cash Flows

StatementofCash FlowsChapter 11 Learning ObjectivesClassify cash transactions as operating, investing, or financing activitiesPrepare the operating activities section of the statement of cash flows using the indirect methodPrepare the investing activities section and the financing activities section of the statement of cash flowsPerform financial analysis using the statement of cash flows11-2Learning ObjectivesPrepare the operating activities section of the statement of cash flows using the direct method11-3Part AFormatting the Statement of Cash Flows11-4Learning Objective 1 Classify cash transactions as operating, investing, or financing activities11-5Cash Flow ActivitiesOperating activities: cash receipts and cash payments for transactions relating to revenue and expense activitiesInvesting activities: cash transactions involving the purchase and sale of long-term assets and current investmentsFinancing activities: inflows and outflows of cash resulting from the external financing of a business11-6Information Sources for Preparing the Statement of Cash FlowsIncome statementBalance sheetsDetailed accounting records11-7Noncash ActivitiesSignificant investing and financing activities that do not affect cashReported after the cash flow statement or in a note to the financial statements11-8Operating Activities—Indirect and Direct MethodsDiffer in presentation format for operating activitiesBoth methods report investing, financing, and noncash activities identicallyBegin with net income and then list adjustments to net income in order to arrive at operating cash flowsMost popular methodEasier and less costlyAdjust the items on the income statement to directly show the cash inflows and outflows from operationsConceptually better methodMore difficult and more costlyIndirect MethodDirect Method11-9Part BPreparing the Statement of Cash Flows11-10Steps in Preparing the Statement of Cash Flows11-11Learning Objective 2 Prepare the operating activities section of the statement of cash flows using the indirect method11-12Operating Activities—Indirect MethodBoth net income and cash flows from operating activities represent the same operating activitiesNet income includes both cash and noncash componentsNet cash flows from operating activities removes noncash components11-13Adjustments for Noncash EffectsDepreciation expenseGain or loss on sale of an asset11-14Changes in Current Assets and Current Liabilities– Increase in a current asset+ Decrease in a current asset+ Increase in a current liability– Decrease in a current liability11-15Learning Objective 3 Prepare the investing activities section and the financing activities section of the statement of cash flows11-16Investing ActivitiesIncrease or decrease in investmentsIncrease or decrease in long-term assets11-17Financing ActivitiesExamine changes in long-term liabilities and stockholders’ equity accounts from the balance sheet11-18Learning Objective 4 Perform financial analysis using the statement of cash flows11-19Components of Cash Return on AssetsCash return on assets measures the operating cash flow generated per dollar of assetsCash flow to sales measures the operating cash flows generated for each dollar of salesAsset turnover measures the sales revenue generated per dollar of assetsCash returnon assetsCash flowto salesAssetturnover×=Operating cash flowsAverage total assetsOperating cash flowsNet salesNet salesAverage total assets×=11-20Learning Objective 5 Prepare the operating activities section of the statement of cash flows using the direct method11-21Operating Activities—Direct MethodReport the cash inflows and cash outflows directlyConverts each revenue and expense item to its cash-basis amountIncome statement items that have no cash effect are not reported11-22End of Chapter 1111-23