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12 Cards in this Set
- Front
- Back
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Eselsbridge |
Oh, if I only had cash! Operating cash flow Investing cash flow Financing cash flow |
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Indirect method, mathematical proof |
Assets = Liab + EQ C/A + F/A = Liab + EQ Cash + other C/A + F/A = Liab + EQ dCash = dLiab + dEq - d Other C/A - d F/A |
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Parts of the CF/S |
Operating CF Investing CF Financing CF |
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Operating cash flow |
dLiab = short term liabilities (bank overdraft, account/trade, accruels, payables) dEQ = net income / loss dOtherC/A = other C/A (incl. prepayment, unearned income) dF/A = dF/A + Depreciation, Amortisation, Depletion |
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investing CF |
dF/A = purchase, invest, goodwill |
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Financing CF |
dLiab long term Liabilities (all notes payable) dEQ = Issues of new stock and redemption (buy back), dividends! |
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Definition cash flow from operating activities |
Cashflow from core business (e.g. receipt of cash in respect of sales). Payments for costs like staff, rent, sales, inflows & outflows relating to working capital items (inventory, trade receivables and trade payables) |
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Working capital |
Inventory, trade receivables, trade payables |
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Definition cash flow from investing activities |
c.f. in respect of payment for resources that will generate income in the future, e.g. payments for non-current assets & receipts from disposal of non-current assets. |
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Definition cash flow from financing activities |
c.f. in respect of capigal. E.G. Receipt of cash invested by owners, repayment of a loan |
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Operating profit |
Sales revenue - operating costs |
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Operating cash flow: |
+ Operating profit + Depreciation -------------------------- XXX
- increase in inventory - increase in trade receivables + increase in trade payables ------------------------------------------- (YYY)
Cash generated from operations XXX + (YYY) - Interest paid + Interest received ----------------------------------------- (ZZZ)
Net cash in/outflow from operating activities: XXX + (YYY) + (ZZZ) |
