Chapter 12 Statement of Cash Flows

Flashcards on Statement of Cash Flows

Statement of Cash Flows

Reports cash receipts, cash payments, and net change in cash resulting from operating, investing, and financing activities during a period.

Operating Activities

Cash effects of transactions that create revenues and expenses and thus enter into the determination of net income.

Investing Activities

Acquiring and disposing of investments and property, plant, and equipment, and lending money and collecting the loans.

Financing Activities

Involve liability and stockholders’ equity items; including obtaining cash from issuing debt and repaying the amounts borrowed, and obtaining cash from stockholders, repurchasing shares, and paying dividends.

Indirect Method

Converting net income from an accrual basis to a cash basis to determine net cash provided/used by operating activities.

Cash Burn Rate

Determines how long a company's cash will last if it's spending more than it's receiving.