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6 Cards in this Set
- Front
- Back
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Indirect method
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Net income +/- Adjustments for noncash items.
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Cash flow ending
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Net increase in cash and cash equivalents +
Cash and cash equivalents at beginning of period = Cash and cash equivalents at end of period |
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Change in cash equation
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Change in cash = Change in liabilities + Change in SE - Change in noncash assets
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RULES FOR Adjusting operating changes. MEMORIZE THIS
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Add the change when an operating asset decreases or an operating liability increases.
Subtract the change when an operating asset increases or an operating liability decreases. |
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For investing activities. Memorize.
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Only purchases paid for with cash or cash equivalents are included in investing activities.
The amount of cash that is received from the sale of assets is included, regardless of whether the assets are sold at a gain or a loss. |
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For financing activities. Memorize.
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Cash repayments of principal are cash flows from financing activities
Interest payments are cash flows from operating activities Dividend payments are cash flows from financing activities If debt or stock is issued for other than cash, it is not included in this section. |
