MGMT 200 Purdue Chapter 11: Cash Flow & Financing Terms

cash flow activities

operating, investing, financing

sales of goods or services

operating, inflow

purchase of inventory

outflow, operating

sale of investments

investing, inflow

purchase of investments

investing, outflow

repayment of bonds or notes payable

financing, outflow

issuance of bonds or notes payable

financing, inflow

collection of interest and dividends

operating, inflow

payment for operating expenses

operating, outflow

Sale of long term assets

investing, inflow

Purchase of long term assets

investing, outflow

Issuance of stock

financing, inflow

Acquisition of treasury stock

financing, outflow

Payment of interest

operating, outflow

Collection of notes receivable

investing, inflow

Lending with notes receivable

investing, outflow

Payment of dividends

financing, outflow

Payment of income taxes

operating, outflow

non cash activites

significant investing and financing activities that do not affect cash

indirect operating activities

begin with net income and list adjustments, most popular method, earlier and less costly

direct operating activities

adjust in the income statement directly in inflows and outflow, the company must also report in the statement of cashflow or notes

non cash items

depreciation expenses and amortization expenses

non operating items

gains and losses on sale of land equipment and buildings

what does a positive cash flow from operations important for

company's survival in long run

what does cash return on assets measure

operating cash flow generated per dollar of assets

what does cash flow to sales measure

operating cash flow generated for each dollar of sales

what does asset turnover measure

sales revenue generated per dollar of assets