Cash Flow Statement and Partnership Overview

Statement of Cash Flows

Reports cash flows from three activities: operating, investing, and financing. The statement shows the net increase or decrease from those activities and ties it into the cash balance.

Operating Activities

Cash flows from day-to-day business operations. Focus: Net income adjusted for non-cash items and changes in current assets and liabilities.

Investing Activities

Cash flows from buying and selling long-term assets or investments.

Financing Activities

Cash flows from borrowing, repaying debt, or dealing with owners/shareholders.

General Partnership (GP)

A type of partnership where all partners share responsibilities and liabilities.

Limited Partnership (LP)

A partnership with at least one general partner and one limited partner, where limited partners have restricted liability.

Limited Liability Partnership (LLP)

A partnership where all partners have limited liabilities, protecting them from the negligence of other partners.

Stockholder Equity Section

Includes Common stock, Preferred stock, Additional paid-in capital, Retained earnings, and Treasury stock.

Board of Directors

A group of individuals elected by a company's shareholders to oversee the company's management and operations.

Bond Premium

The difference between a bond's par value and its higher carrying value; occurs when the contract rate is higher than the market rate.

Bond Par

The amount the bond issuer agrees to pay at maturity and the amount on which cash interest payments are based.

Bond Discount

The difference between a bond's par value and its lower issue price or carrying value; occurs when the contract rate is less than the market rate.

Controlling Interest

The ownership of enough voting stock in a company to control its policies and management.

Partner Ending Capital Balance

Calculated as beginning capital + (beginning capital * %) + additional investment - withdrawals.

Liquidity

The ability to meet short-term obligations.

Solvency

The ability to generate future revenues and meet long-term obligations.

Profitability

The ability to provide financial rewards sufficient to attract and retain financing.

Market Prospects

The ability to generate positive market expectations.

Stock Dividend

A distribution of additional shares of its own stock to its stockholders without any payment in return.

Cumulative Preferred Stock

Gives its owners a right to be paid both the current and all prior periods' unpaid dividends before any dividend is paid to common stockholders.

Convertible Preferred Stock

Gives investors the option to convert preferred shares into a fixed number of common shares.

Callable Preferred Stock

Preferred stock that the company can take back at any time.