會計英語課件：Statement of Cash Flows

StatementofCashFlowsAims:1.ExplaintheconceptofTheCashFlowStatements.2.Classifyactivitiesaffectingcashasoperating,investing,orfinancingactivities.3.Usethedirectmethodtomeasurecashflows.4.Determinecashflowsfromincomestatementandbalancesheetaccounts.5.Usetheindirectmethodtocalculatecashflowsfromoperations.8.1

IntroductiontoStatementofCashFlowsAstatementofcashflowsreportsthecashreceiptsandcashpaymentsofanentityduringaperiod.Itexplainsthecausesforthechangesincashbyprovidinginformationaboutoperating,financingandinvestingactivities.8.2

ClassificationofaFirm’sActivitiesAffectingCash(1)operatingmanagementisprimarilyconcernedwithmajorday-to-dayactivitiesthatgeneraterevenuesandexpenses(operatingactivities);and(2)financialmanagementislargelyconcernedwithwheretogetcash(financingactivities)andhowtousecash(investingactivities).CASHINFLOWSCASHOUTFLOWSCollectionsfromcustomersCashpaymentstosuppliersInterestanddividendscollectedOtheroperatingreceiptsOtheroperatingreceiptsInterestpaid

Taxespaid

Otheroperatingcashpayments(1)OperatingActivities(OA)(Table8-1):CASHINFLOWSCASHOUTFLOWSSaleofproperty,plant,andequipmentPurchaseofproperty,plant,andequipmentSaleofsecuritiesthatarePurchaseofsecuritiesthatare

notcashequivalents

notcashequivalentsReceiptofloanpaymentsMakingloans(2)InvestingActivities(IA)involve(Table8-2):1)providingandcollectingcashasalenderorasanownerofsecurities;2)acquiringanddisposingofplant,property,equipment,andotherlong-termproductiveassets.CASHINFLOWSCASHOUTFLOWSBorrowingfromcreditorsRepaymentofamountborrowedIssuingequitysecuritiesRepurchaseofequityshares

(includingthepurchaseoftreasurystock)

Paymentofdividends

(3)FinancingActivities(FA)(Table8-3):Financingactivitiesinvolveobtainingresourcesasaborrowerorissuerofsecuritiesandrepayingcreditorsandowners.8.3

TwoMethodsofComputingCashFlowsfromOperatingActivitiesTwoapproachescanbeusedtocomputethenumberreportedascashflowfromoperatingactivities.(1)Computingitascollectionslessoperatingdisbursementsiscalledthedirectmethod;(2)Adjustingtheaccrualnetincometoreflectonlycashoutlaysiscalledindirectmethod.8.4

TransactionsAffecting

CashFlowsfromAllSourcesTYPE

OF

TRANSACTIONCASHOperating

ActivitiesSales

of

goods

and

services

for

cash+Sales

of

goods

and

services

on

credit0Receive

dividends

or

interest+Collection

of

accounts

receivable+Recognize

cost

of

goods

sold0Purchase

inventory

for

cash-Purchase

inventory

on

credit0Pay

trade

accounts

payable-Accrue

operating

expenses0Pay

operating

expenses-Accrue

taxes0Pay

taxes-Accrue

interest0Pay

interest-Prepay

expenses

for

cash-Write

off

prepaid

expenses0Charge

depreciation

or

amortization0InvestingActivitiesPurchasefixedassetforcash-Purchasefixedassetsbyissuingdebt0Sellfixedassets+Purchasesecuritiesthatarenotcashequivalents-Sellsecuritiesthatarenotcashequivalents+Makealoan-FinancingActivitiesIncreaselong-termorshort-termdebt+Reducelong-termorshort-termdebt-Sellcommonorpreferredstock+Repurchaseandretirecommonorpreferredstock-Purchasetreasurystock-Paydividends-Convertdebttocommonstock0Reclassifylong-termdebttoshort-termdebt08.5

PreparingaStatementof

CashFlowsUsingtheDirectMethodCashflowsfromoperatingactivities:(1)Collectionsfromsalestocustomersarealmostalwaysthemajoroperatingactivity.(2)Disbursementsforpurchasesofgoodstobesoldandoperatingexpensesarealmostalwaysthemajoroperatingcashoutflows.(3)Theexcessofcollectionoverdisbursementsisnetcashprovidedbyoperatingactivities.8.6

PreparingaStatementof

CashFlowsUsingtheIndirectMethodTheindirectmethodofcomputingcashflowsfromoperatingactivitiesreconcilesnetincometothenetcashprovidedbyoperatingactivities.(1)Depreciationisaddedbacktonetincomebecauseitisanon-cashitem.(2)Adddecreasesinnon-cashcurrentassets.(3)Addincreasesincurrentliabilities.(4)Deductincreasesinnon-cashcurrentassets.(5)Deductdecreasesincurrentliabilities.8.7

ADetailedExampleoftheDirectMethodCASHFLOWSFROMOPERATINGACTIVITIES:

Cashcollectionsfromcustomers$360

Cashpayments:

Tosuppliers144

Toemployees30

Forinterest8

Fortaxes40Totalcashpayments222Netcashprovidedbyoperatingactivities

$138

CASHFLOWSFROMINVESTINGACTIVITIES:

Purchasesoffixedassets(574)

Proceedsfromsaleoffixedassets20Netcashusedbyinvestingactivities

$(554)

CASHFLOWSFROMFINANCINGACTIVITIES:

Proceedsfromissueoflong-termdebt240

Proceedsfromissueofcommonstock196

Dividendspaid(38)Netcashprovidedbyfinancingactivities

$398

Netdecreaseincash(18)Cash,December31th,201850Cash,December31th,201932MIKECOMPANYStatementofCashFlows(inthousands)FortheYearEndedDecember31st,20198.8

SumminguptheAmountoftheChangeinCashCASHFLOWSFROMOPERATINGACTIVITIES:

Cashcollectionsfromcustomers$360

Cashpayments:

Tosuppliers144

Toemployees30

Forinterest8

Fortaxes40Totalcashpayments222Netcashprovidedbyoperatingactivities

$138

CASHFLOWSFROMINVESTINGACTIVITIES:

Purchasesoffixedassets(574)

Proceedsfromsaleoffixedassets20Netcashusedbyinvestingactivities

$(554)

CASHFLOWSFROMFINANCINGACTIVITIES:

Proceedsfromissueoflong-termdebt240

Proceedsfromissueofcommonstock196

Dividendspaid(38)Netcashprovidedbyfinancingactivities

$398

Netdecreaseincash(18)Cash,December31th,201850Cash,December31th,201932MIKECOMPANYStatementofCashFlows(inthousands)FortheYearEndedDecember31st,20198.9

ComputingCashFlowsfromOperatingActivitiesOperatingcashinflowsminusoperatingcashoutflowsequalsthenetcashprovidedby(orusedby)operatingactivities.Collectionsfromsalestocustomersareusuallythelargestsourceofoperatingcashinflows.

Disbursementsforpurchasesofgoodstobesoldandoperatingexpensesareusuallythelargestsourcesofoperatingcashoutflows.Sales

$400000

Beginningaccountsreceivable50000

Potentialcollections

$450000

Endingaccountsreceivable

(90000)

Cashcollectionsfromcustomers

$360000

(1)ComputingtheCashCollectionsfromCustomers.Inourexample,$360000wascollectedfromcustomers.ThatamountisdeterminedasfollowsSales$400

000Decrease(increase)in

accounts

receivable

(40

000)

Cash

collections

from

customers

$360

000

NotethattheincreaseinA/Rmeansthatsales>collections.8.11

ComputingtheCashPaymentstoSuppliersThedifferencebetweencostofgoodssoldandcashpaymentstosupplierscanbedeterminedbylookingatinventoryandaccountspayable.Endinginventory$200000

Costofgoodssold200000Inventorytoaccountfor$400000

Beginninginventory

(120000)

Purchasesofinventory

$280000

Beginningaccountspayable$12000Purchasesofinventory280000

Totalamounttobepaidincash$292000Endingaccountspayable

(148000)

Accountspaidincash

$144000

Theeffectsofinventoryandaccountspayableonthepreviousslidecanbecombinedintoonecalculationasfollows:Cost

of

goods

sold$200

000Increase(decrease)in

inventory80

000Decrease(increase)in

accounts

payable

(136

000)

Payments

to