Tata Motors Cash Flow Statement

Tata Motors Cash Flow Statement
Abstract: Cash flow statement is an important document that gives quick and ready information regarding the cash flow analysis
of a company. It is a statement depicting change in cash and cash equivalents position during a period. TATA Motors is an Indian
Multinational automotive company. It is the world's fifth largest motor vehicle manufacturing company, fourth largest truck
manufacturing company and also the second largest bus manufacturing company by volume. Recently, the concern has reported
fluctuating turnover for last five years in its annual reports. Hence, it is necessary to judge the sufficiency of the cash position to
support the success story of the company. This study is based on financial figures disclosed by company in five ... Show more
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To measure the weight of such sources and uses of cash against cash profit position of the firm.
To identify the strength and weakness in cash flow position of the firm.
IV. RESEARCH METHODOLOGY:
Research Type: It is an analytical research based on the secondary data. It investigates the financial figures of the concern using
theoretical framework of cash flow statement analysis. Figures of cash flow statement of 5 years i.e. 2011–12, 2012–13, 2013–
14, 2014–15 and 2015–16 is analyzed to identify strength and weakness in cash flow of the business.
Type of Data: Secondary Data
Secondary data involves figures denoted regarding cash inflow and cash outflow in cash flow statement reported in annual
reports of Tata Motors for five years. Also some important information is collected by various sources of secondary data such as
books, websites and official release of business firm.
Analysis tools and techniques:
Figures are analyzed using basic mathematical tools like average and percentage etc. and it is interpreted using various kinds of
charts and graphs.
V. DATAANALYSIS AND INTERPRETATION.
1. Analysis of Revenue:
Table 1: Net Revenue in
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Cash Flow Statement: Dowlas Iron Company
2. Cash Flow Statement
2.1: Before Availability of Cash flow statements
2.2: Date of Applying Cash flow statements
2.3: What is Cash flow statement?
2.4: Direct Vs. Indirect Method
2.5: Did the invention of Cash flow statement cover the gap info & why?
2.1: History of cash flow statement:
Before the availability of the cash flow statement the business firms suffered from the lack of the information that leaded to
bankruptcy of those firms. The history of cash flow statement can be drawn back to the year 1863. In 1863 Dowlas Iron
Company had recouped from a great business downfall, but the company had no enough cash to invest for new blast furnace,
even though having made a profit. They had to clarify why they had no money to invest, the comparison ... Show more content
on Helpwriting.net ...
Indirect Methods of Cash flow statement:
 Difference between direct and indirect methods:
a. Direct method:
Advantages :
Is more preferred to use according to international accounting standards board (IASB) and generally accepted accounting
principles (GAAP), because it contains more details and it is more easier than the indirect method, also it sorts all the company's'
transactions and summarizes them into categories which makes it more easier for the company to sort out checks and paid bills.
Disadvantages :
Companies with huge number of transactions will not be able to record every detail because of time and more labor cost. For the
stock corporations the cash flow statement is made public so the competitors could use it against the company.
b. Indirect method:
The main objective is to change the accrual basis of cash into cash basis.
More difficult and complicated than the direct method.
Reconciles accrual net income to cash from operating activities.
 Information needed for cash flow statement:
As it has been shown in the article "how to prepare a cash flow statement" by "Zion's bank" they stated the

Financial Statements Of Cash Flow
The statement of cash flow is one of the financial statements that shareholders tend to evaluate to ensure that all transactions are
properly stated in each of the three activities mentioned above; operating, investing, and financing. The statement of cash flows
is also commonly overlooked by both the balance sheets and income statements numbers.
The cash flow statement is important for the business as it brings valuable information that can help evaluate a corporation. The
statement will show if the business is low on money even if the financial statements shows that is profitable. It will reflect if the
owner withdrew to much cash from the corporation. It will also reflect the principal payment of a loan and the correct amount
used to acquire equipment, property, and other assets that the income statement will not show. The absence of this statement can
hinder the operation of a business as the owner could easily fall in the negative (loss) by not having eyes on the cash out flow
exceeding the cash inflow.
Therefore, the adaptation of having a statement of cash flows becomes essential to any business or organization. With the
adaption of such a system personnel such as stakeholders become essential. Stakeholders are a key role personnel when it comes
to motivating the employees, acquiring resources to assist on the final decision or final project, provide a valuable input, and
ultimately build trust with to increase consensus at the final decision making. The

Analysis of Cash Flow Statement Essay
Analysis of Cash Flows Statements By Song Hanxiao
Pace University – New York Campus
MBA 640, 72052
Fall 2011
John Paul
Required Research Paper
Contents Abstract
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
3 | I. Introduction of importance of Cash Flows statements –––––––––––––––––––––––––––––––––––––4 | II. Function of Cash
Flow Statements –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––5 | III. Analysis of Cash Flow
Statement ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––7 | 1. Analysis of Repayment Ability
––––––––––––––––––––––––––––––––––––––––––––––––––––––––––7 | 2. ... Show more content on Helpwriting.net ...
For example, if one the following is one company's cash flow statement: revenue of 4.8 million from current period sales and
providing labor, bonus of 0.75 million for employees, purchasing fixed assets in current period for 0.95 million, and payment of
0.18 million for banking interest. As the same, cash inflows and outflows from other operating activities can be allocated into
cash flow statement. Therefore, cash flow statement can reveal the reason of cash inflows and outflow, to say in another way,
cash comes from where and go to where, which information balance sheet and income statement cannot provide. 2. Helpful to
evaluate the corporation's overall financial situation objectively
One purpose of making financial statements by managements is to reflect company's operation and financial situations, which
can provide benefit information for decision making level. Another aspects is creditors and investors seek to better investment
decision after they analyze financial statements. Therefore, it is very important to management level, creditors and investors
through evaluating corporation's financial status objectively. And we can analyze through three parts, which is operation
activities, investing activities and financial

To What Extent Might the Cash Flow Statement Help to...
To what extent might the cash flow statement help to overcome the traditional limitations of financial statement analysis in
evaluating the past performance and predicting the future successes or failures of business organisations?
Accounting is the major means of organizing and summarizing information about economic activities. The information which is
provided by the accounting practices through financial statement analysis, provides help to decision makers to take decision.
There are various forms of Accounting models which is of great help example if the financial statements for an organization is
made statements like Balance Sheet, Profit and loss Account etc it helps the organization out to makes its stand in the market ...
Show more content on Helpwriting.net ...
This is a disadvantage of Ratio because it has to be depended on other figures when it is individual it represents nothing
There are certain standard set which cannot became for organisation now this again deviates from one another for different
organisation.
Ratio is not calculated on a daily basis it is prepared as and when the income statement and balance sheet is prepared that takes
palace annually.
MODERN MEHTOD OF ANALYSING: CASH FLOW STATMENT
Cash flow is one of the most vital elements in the survival of a business to include CFs in the annual report of the company is a
recent concept. Complementing the balance sheet and income statement, the cash flow statement (CFS), its a mandatory part of
a company 's financial repot, records the amounts of cash and equivalents entering and leaving a company. The CFS helps the
investor to understand and figure out the position of the company from where the money comes and where the money is spent
by an Survival of a business depends not only on profits but perhaps more on its ability to pay its debts when they fall due.
Shareholders might believe that if a company makes a profit after tax , then this is the amount which it could afford to pay as a
dividend. Unless the company has sufficient cash available to stay in business and also to pay a dividend, the shareholders '
expectations would be wrong.
It can be positive, or negative, which is obviously

Income Statement Of Cash Flow From Operations
Income statement
An Income statement or profit and loss statement, indicated amount of profits generated by a firm over a given period, often 1
year in its most basic form, the income statement may be represented as follows :
Sales Revenue – Expenses =Net income
The income statement begins with sales or revenue, from which we subtract the cost of goods sold to yield gross profits . Next,
operating expenses are deducted to determine operating income. Operating expenses includes marketing and selling expenses,
general and administrative expenses and depreciation expense. Finally by deducting the interest expense and the tax expense
from the operating income we get the net income.
Balance sheet
A balance sheet provides a snap short about the firm's financial position at a specific point in time, presenting in time, presenting
its asset holdings, liabilities and owner's supplied capital.
Statement of Cash flows
The statement of cash flows is being prepared in the firms, as because of it does not include accrual basis items. It is an
overview of cash flow from operations, cash flow from investment activities and cash flow from financing activities
Cash flow from Operations + cash flow from investment opportunities +cash flow from
Financing activities = Net change in cash
3–2
Gross Profit:
Gross profit is calculated by deducting cost of goods sold from sales revenue
Gross profit= Sales – cost of goods sold
Operating profit:
Operating profit is calculated by

What Is A Cash Flow Statement?
What is a Cash Flow Statement?
One of the most important part of starting a business is creating a cash flow statement, also known as the statement of cash flow.
The statement of cash flows is defined as a statement of sources and uses of cash in a business for a specific period of time
(Katz, J. & Green, R.). The statement of cash flow is the main one, of four financial statements, the other statements are just as
important when owning and operating a business. The way that a business owner can prove the business is making money would
be through keeping careful accounting records. Based on an accountant, there are five reasons why accounting is important to a
small business.
It proves how your business is doing financially.
Shows ... Show more content on Helpwriting.net ...
Income Statement is composed of the following two elements:
 Income: The business earnings over a specified period
 Expense: The cost of operating the business over a period
 Net profit or loss is obtained by deducting expenses from income
Statement of stockholders ' equity; Statement of Changes in Equity, also known as the Statement of Retained Earnings, details
the movement in owners ' equity over a period. The movement in owners ' equity is derived from the following components:
 Net Profit or loss during the period as reported in the income statement
 Share capital issued or repaid during the period
 Dividend payments Gains or losses recognized directly in equity
 Effects of a change in accounting policy or correction of accounting error ("What Is A Cash Flow" 2004).
Components of Cash Flow Statement
The inflow and outflow of cash must be reported in the statement of cash flow. It can be reported as either a direct statement;
only from the business's cash records or indirect statement; starts with net income and adjusts the accruals and deferrals that can
be reconciled with the others statements. The following are activities that are recorded in the cash flow statement:
1. Operating activities includes all transactions performed in producing, and selling goods and services. It shows the movement
of

Cash Flow Statement And Its Benefits And Disadvantages
When it comes to understanding business finances, the ability to read different financial statements becomes crucial. A cash flow
statement is an important and essential part of keeping a record of the business' financial liquidity. Business's liquidity matters
because it often directly signals the company's ability to pay off debts and to generate money.
In this guide, you'll learn to understand the definition of a cash flow statement with its benefits and disadvantages. The guide
will also look at the structure of a financial statement and the different preparation methods you can use to calculate a company's
cash flow.
What is a cash flow statement?
Cash flow statement is one core three financial reporting tools companies use. It is designed to complement the balance sheet
and the income statement. In most accounting systems around the world, a cash flow statement is part of the mandatory
reporting.
A cash flow statement is a an official record of cash and cash equivalents entering and leaving a business entity. It focuses on
showcasing the sources of money in the business as well as how it is spent over a specific period.
It usually looks at the general accounting period, such as financial year, but cash flow statement can be created over any specific
period.
It is important to note that a cash flow statement doesn't include other money revenues, such as depreciation or other such non–
cash items. The statement is similar to income statement, as a statement to

Ratio Analysis and Statement of Cash Flows
Ratio Analysis and Statement of Cash Flows Financial ratios are "just a convenient way to summarize large quantities of
financial data and to compare firms' performance" (Brealey & Myer & Marcus, 2003, p. 450). Financial ratios are very useful
tools in order to determine the health of a company, help managers to make decision, and help to compare companies that
belong to the same industry in order to know about their performance. Home Depot and Lowe's are two home improvement
chains in the United States. Home Depot is the leading company in this industry followed by Lowe's as the second largest. This
paper uses financial ratios to compare these companies regarding operating profitability, asset utilization, and risk management
in the ... Show more content on Helpwriting.net ...
Leverage ratios measures how much financial leverage the companies have take on (Brealey & Myer & Marcus, 2003). Home
Depot's and Lowe's risk management can be analyzed by calculating their leverage ratios. The long–term debt ratio measures the
long–term debt to total long–term capital. Home Depot long–term debt ratio in 2005 was 0.9 and 0.32 in 2006. Lowe's long–
term debt ratio was 0.20 in 2005 and 0.22 in 2006. It can be concluded that in Home Depot, 32 cents of every dollar of long–
term capital is in the form of long– term debt in 2006 and in Lowe's, 22 cents of every dollar of long–term capital is in the form
of long–term debt.
• Home Depot Long–term debt ratio 2005 =
• Home Depot Long–term debt ratio 2006 =
• Lowe's Long–term debt ratio 2005 =
• Lowe's Long–term debt ratio 2006 =
Another useful leverage ratio is the total debt. Home Depot's total debt ratio in 2005 was 0.39 and 0.52 in 2006. Lowe's total
debt ratio in 2005 was 0.41 and 0.43 in 2006. Home Depot is financed 52% with debt in 2006 and Lowe's is financed 43% with
debt in 2006. Even though, Home Depot has a better profit than Lowe's, it can be also stated that Home Depot has more debt
than Lowe's.
• Home Depot total debt ratio 2005 =
• Home Depot total debt ratio 2006=
• Lowe's total debt ratio 2005 =
• Lowe's total debt ratio 2006 =

Balance Sheet and Statement of Cash Flow
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C H A P T E R
5
BALANCE SH EET AN D STATEMENT OF CASH FLOWS
LEARNING OBJECTIVES
After studying this chapter, you should be able to:
1 2 3 4 5 6 7 8 9
Explain the uses and limitations of a balance sheet. Identify the major classifications of the balance sheet. Prepare a classified
balance sheet using the report and account formats. Determine which balance sheet information requires supplemental
disclosure. Describe the major disclosure techniques for the balance sheet. Indicate the purpose of the statement of cash flows.
Identify the content of the statement of cash flows. Prepare a basic statement of cash flows. Understand the usefulness of the
statement of ... Show more content on Helpwriting.net ...
USEFULNESS OF THE BALANCE SHEET
Op
Liquidity era tio ns
How quickly will my assets convert to cash?
By providing information on assets, liabilities, and stockholders' equity, the balance sheet provides a basis for computing rates
of return and evaluating the capital structure of the enterprise. As our opening story indicates, analysts also use information in
the balance sheet to assess a company's risk2 and future cash flows. In this regard, analysts use the balance sheet to assess a
company's liquidity, solvency, and financial flexibility. Liquidity describes "the amount of time that is expected to elapse until
an asset is realized or otherwise converted into cash or until a liability has to be paid."3 Creditors are interested in short–term
liquidity ratios, such as the ratio of cash (or near cash) to short–term liabilities. These ratios indicate whether a company, like
Amazon, will have the resources to pay its current and maturing obligations. Similarly, stockholders assess liquidity to evaluate
the possibility of future cash dividends or the buyback of shares. In general, the greater Amazon's liquidity, the lower its risk of
failure.
GROUNDED
The terrorist attacks of September 11, 2001, showed how vulnerable the major airlines are to falling demand for their services.
Since that infamous date,

Financial Statements And Cash Flows For Each Company
Exploring the Financial Statements The balance sheet, income statement, and statement of cash flows for each company is
presented in the Appendix. Dollar Tree's financial statements are presented in Attachments 2–4 (pages XXX–XXX). Dollar
General's financial statements are presented in Attachments 5–7 (pages XXX–XXX). All calculations described in this current
section can be found in Attachment 8 (page XXX). Both Dollar Tree and Dollar General use U.S. Generally Accepted
Accounting Principles (GAAP) to compile their financial statements. Dollar Tree's fiscal year–end is January 31 whereas Dollar
General's fiscal year end is January 30. Dollar Tree and Dollar General have very similar capital structures. At the end of the
fiscal year 2014 (January 31 or 30, 2015), both companies had about 50% liabilities and 50% equity. This represents a debt–to–
equity ratio of 1.00.
Dollar Tree: Attachment 2 (page XXX) shows the consolidated balance sheet for Dollar Tree. Dollar Tree had a total of
$3,567,000 in assets at the fiscal year–end of 2014; comprised of current assets of $1,994,600 (55.9%) and long–term assets and
intangible assets of $1,572,400 (44.1%).
Attachment 8 (page XXX) shows that Dollar Tree had a return on average assets (ROAA) of 18.9% for the fiscal year–end of
2014. ROAA can be disaggregated into profit margin (profitability) and asset turnover (productivity) ratios. Dollar Tree's profit
margin at the fiscal year–end of 2014 was 7.0% and its asset

Financial Statement and Cash Flow Analysis
Chapters 3 and 13 Financial Statement and Cash Flow Analysis Balance Sheet Assets Cash Inventory Accounts Receivable
Property Plant Equipment Liabilities and Shareholder's Equity Accounts Payable Notes Payable Accrued Wages Bank Loans
Bonds Common Stock Retained Earnings Total Liabilities and Shareholder's Equity Total Assets Income Statement Used to
figure out how much money we are earning for: (a) (b) (c) (d) vendors, employees, etc – Cost of Goods Sold, Operating
Expenses lenders, bondholders – Interest, government – Taxes, owners/stockholders – Dividends/Retained Earnings Sales (–)
Cost of Goods Sold (–) Operating Expenses (–) Depreciation EBIT (–) Interest EBT (–) Taxes Net Income (–) Dividends
Additions to R/E revenues cost to ... Show more content on Helpwriting.net ...
Adds back in noncash items. Net Operating Working Capital = Operating Current Assets – Operating Current Liabilities
Operating = those flows from normal operations Operating Current Assets = Cash, A/R, Inv Operating Current Liabilities = A/P,
Accruals Net Operating Profit after Taxes (NOPAT) = EBIT ( 1 – tax rate ) Free Cash Flow (FCF) = NOPAT – Net investment in
operating capital Net investment in operating capital = – change in current assets (operating) + change in current liabilities
(operating) – change in net capital assets Current asset increase represents an investment Current liability increase represents
borrowing Net capital assets = Increase in PPE – Depreciation Market Value Added (MVA) Consistent with shareholder wealth
maximization MVA = market value of common stock – initial value of equity capital example: Google, Inc. Google went public
(IPO) on August 19, 2004 at $85 per share Google stock value on June 16, 2008 was $366.00 Shares Outstanding = 1.2B
MVAGOOG = $439.2B – $102B = $337.2B Economic Value Added (EVA) EVA

SKG Cash Flow Statement
The three most important points in the Group (Consolidated) Cash Flow Statement are as follows:
1. Cash generated from operations has increased from €929m in 2012 to €1,018m in 2013. This represents a 9.58% increase.
This indicates that there has been a significant improvement in the cash–generating ability of SKG's core activities. This is
probably as a result of the large number of businesses acquired in 2012. This information would be of important value to
investors as it give them a good insight into SKG's cash–generating process.
2. Net cash outflow from investing activities has decreased from €480m in 2012 to €366m in 2013. This represents a 23.75%
decrease. SKG put substantial investment into subsidiaries in 2012 (€179m). However, ... Show more content on
Helpwriting.net ...
Firstly, the company's ability to maintain a strong cash flow in difficult economic times is impressive and also enabled a debt
paydown of €171 million. SKG's current ratio has stayed relatively consistent over the years at around 1.5, again reflecting the
financial health of the company and its ability to meet its obligations. SKG also has no liquidity problems as reflected in the
quick ratio. SKG's times interest cover ratio of 2.99 in 2013 shows that the company is very capable of managing its interest
expenses. The strong earnings growth in the Americas shows that there are huge growth opportunities for SKG. The company's
strategy for takeover and expansion has resulted in a growing business with improving liquidity and a bright

Presentation Of The Statement Of Cash Flows
Presentation of the Statement of Cash Flows The statement of cash flows is a relatively new statement. Focused on cash–basis
accounting rather than accrual–basis, the purpose of this statement is to describe the effects of a company's cash inflows and
outflows. This paper will discuss the current standards for the statement of cash flows, the history of the statement, and if the
direct method or indirect method is more advantageous for the users. Current Generally Accepted Accounting Principles
(GAAP) states, "[i]n reporting cash flows from operating activities, entities are encouraged to report major classes of gross cash
receipts and gross cash payments and their arithmetic sum–the net cash flow from operating activities (the direct method)"
(ASC–230–10–45–25). In addition, per ASC 230–10–45–30, if a company chooses to report the change in cash flow from
operating activities using the direct method, it must also include a separate schedule containing the indirect method, which is a
reconciliation of net income to cash flows from operating activities. In choosing to write the standards this way, the Financial
Accounting Standards Board (FASB) considered both methods and recognized the advantages of each. However, the board
noted that neither method provided enough benefit on its own to justify the required use of one or the other. The board believes
that the more comprehensive approach would be to use the direct method in the operating section of the statement of

A Statement Of Cash Flow
STATEMENT OF
CASH FLOWS
Research conducted by Matthew Firth
CONTENTS
What is a statement of cash flow Page 3
What is the purpose of a statement of cash flow Page 3
How does a statement of cash flow effect business managers and shareholders? Page 4
The structure of a statement of cash flow explained Page 4
How to prepare a statement of cash flow Page 5
Example of a statement of cash flow Page 6
References Page 7
What is a statement of cash flow?
A statement of cash flow or cash flow statement is a detailed report that provides investors and shareholders with the correct
information about cash inflows and outflows and the resulting change in cash and cash equivalents over a period of time. They
are ... Show more content on Helpwriting.net ...
When a statement of cash flow is viewed along with the other financial statements, it provides information that enables users to
evaluate the changes in net assets of an enterprise, its financial structure including its liquidity and solvency and its ability to
affect the amounts and timing of cash flows in order to adapt to changing circumstances and opportunities.
Under the heading, Benefits of Cash Flow Information, the ministry of corporation affairs describes that, "Cash flow
information is useful in assessing the ability of an organization to generate cash and cash equivalents that enables users to
develop models to assess and compare the present value of the future cash flows of different companies" (Benefits of Cash Flow
Information, Government of India). As a result of this the cash flow statement enhances the comparability of the reporting of
operating performance by different companies because it eliminates the effects of using different accounting treatments for the
same transactions and events. Consistency in financial statements year over year plays a large part in accounting as it allows
management to easily compare the company's performance.
How does a statement of cash flow effect business managers and stakeholders?
A statement of cash flow is an extremely important financial statement for management or external influencers to continually
review. Current or potential shareholders like to see the liquidity of a

The Income Statements, Balance Sheet, And Statement Of...
Income Statements – Income Statement, Balance Sheet, and Statement of Cash Flows
Financial statements are very important for decision makers in the business world. They inform the firm's owners, lenders and
managers of the performance of the company and their employees. Standardized financial statements make for financial
transparency between all businesses and sectors of business. Financial statements are important to companies not only to
measure performance but to obtain capital through debt and equity. The main financial statements used by all companies, private
and public, are the balance sheet, income statement (profit and loss statement), and statement of cash flows. Companies also use
financial ratios to determine if they are performing to standards and are determine if they are increasing revenues sufficiently
with the amount of expenses and debt taken on.
Income Statement
The income statement measures the flow of business activity by comparing revenues to the expenses over a period of time, as
opposed to the momentary status of the business at a point in time (Brian P. Brinig, 2011). The income statement is important
because it lists the amount of expenses that were incurred to create the revenues of the company. The biggest typical expenses
for a company are the cost of goods sold, advertising and promotion, depreciation, wages and salaries, and rent.
Balance Sheet
A balance sheet lists assets, liabilities and equity of a business at a single point in

The Cash Flow Statement Is An Important Financial...
What is the purpose of a cash flow statement?
a. The cash flow statement is an important financial indicator of a company 's short–term viability. The report describes where
the entity 's cash is generated from and how it is spent over a certain designated period of time.
2) List and describe the elements making up the cash flow statement.
a. The cash flow statement is composed of cash inflows (receipts) and outflows (expenses). Inflows and outflows are reported
for operating, financing, and investing activities.
3) List and define the different types of cash receipts in a cash flow statement.
a. Cash receipts are reported for operating, financing and investing activities. Cash from operations includes cash that is
obtained through daily business operations. Cash from investing is generated from investing in assets that produce a yield. This
can include the sale of equipment, other businesses, or long–term assets. Cash from financing is cash that is received or paid due
to borrowing practices. Dividends are also included in this section.
4) Describe the two different methods of preparing a cash flow statement. What is the primary difference between the two
methods?
a. The two different methods of preparing a cash flow statement are the direct and indirect methods. The direct method is
encouraged by the financial accounting standards boards, but not required. The differences in the two only affect the
presentation of the operations section, not the investigating and

Income Statement Of Pfizer Company
Income Statement of Pfizer Company for the fiscal year 31 March 2014 In Millions
Sales 100000
Cost of goods sold 45000
Gross Profits 55000
Operating Expenses
Selling, General and Administration Exp 10000
Research and development Expenses 15000
Total Operating Expenses 25000
Operating Income 30000
Interest Expenses 12000
Earnings before tax 18000
Income tax provision 5000
Net Income 13000
Statement of Cash Flow of Pfizer Company for the year ended on 31 March 2014 In Millions
Net Cash Flow from Operating Activities 35000
Net Cash Flow from Investing Activities (13500)
Net Cash Flow from Financing Activities (15500)
Net Increase in the cash and cash equivalent 6000
Cash and Cash equivalent beginning balance 35000
Cash and Cash equivalent Ending Balance 41000
Balance Sheet of Pfizer Company as on 31 March 2014 In Millions
Assets Amount in $ Liabilities and Equity Amount in $
Current Assets Current Liabilities
Cash and Cash Equiv. 41000 Account Payables 39500
Short term Investment 12000 Accrued & other Liab. 21500
Receivables 28000 Total current liability 61000
Inventories 40000 Long term debt 150000
Other Current Assets 27000 Other non–current liab 37000
Total Current Assets 148000 Total Liability 248000
Property Plant and Equipment 165000 Stock Holders Equity
Long term Investment 85000 Paid up Capital 170000
Other Noncurrent Assets 56000 Retained Earning 36000 Total stock holder equity

Cash Flows
Cash Flows
Aleshia Wisch
ACC206: Principles of Accounting II
Prof. Eric Sumners
August 11, 2014
ACC 206 Week Assignment
1. Critical Thinking Question:
Answer the following questions:
Why are noncash transactions, such as the exchange of common stock for a building for example, included on a statement of
cash flows? How are these noncash transactions disclosed?
It is important for a company to show what assets they have on hand that can convert to cash. Non cash transactions are
disclosed in the footnotes of the financial statement of cash flows. "...a company may exchange common stock for land. Such
transactions do not trigger a direct inflow or outflow of cash, but they are nonetheless highly significant ... Show more content
on Helpwriting.net ...
The $9,000 loss would be added back to the net income under Operating Activities.
5. Cash flow information: Direct and indirect methods
The comparative year–end balance sheets of Sign Graphics, Inc., revealed the following activity in the company 's current
accounts:
20X5
20X4
Increase / Decrease)
Current assets
Cash
$55,400
$35,200
$20,200
Accounts receivable (net)
83,800
88,000
–4,200
Inventory
243,400
233,800
9,600
Prepaid expenses
25,400
24,200
1,200
Current liabilities
Accounts payable
$123,600
$140,600

($17,000)
Taxes payable
43,600
49,200
–5,600
Interest payable
9,000
6,400
2,600
Accrued liabilities
38,800
60,400
–21,600
Note payable
44,000
–
44,000
The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm 's selling
and administrative expenses. The company 's condensed income statement follows.
SIGN GRAPHICS INC.
Income Statement for the Year Ended December 31, 20x5
Sales
$713,800 Less: Cost of goods sold
323,000 Gross profit
$390,800
Less: Selling & administrative expenses
$186,000
Depreciation expense
17,000
Interest expense
27,000
230,000
Add: gain on sale of land

Cash Flow Statements Tax Calculations And Balance Sheet
CASE STUDY
Name: Xianbo Xie
Course: Introduction financial planning
Tutor: Cath Sharples
Question one
Cash flow statements tax calculations and balance sheet for the 3 financial years ending 30 June 2015 – 2017
Family balance sheet
Financial year ending June 2015
Assets $ $
Family house 620,000
Boat 20,000
Car Jenny 35,000
Car Jerry 12,000
House contents 50,000
Commonwealth Bank shares 53,000 Term deposit with Bundoora 165,000
Savings account with Bundoora 26,000
Superannuation funds (combined) 330,000
Total 1,290,000
Liabilities
Family home mortgagee 250,000
Personal car loan 16,000
Credit card debt 6,000
Total 272,000
Net worth 1,018,000
The family's Tax Calculation
Financial year ending June 2015 $ $ ... Show more content on Helpwriting.net ...
deposits 4,455
Employer Superannuation contribution (15% tax deduction) 9975 215,633
Employer Superannuation contribution (15% tax deduction) 4750
Total 188,959
Less tax payable 78,235.06
Net income 110,706
Expenses
Mortgage and loan payments 29,500
Work related expenses 2,500
Insurance 3,000
Household expenses 25,800
Private education expenses 17,000
Utilities 4,200
Entertainment 8,000
Travel and holidays 7,000

Motor vehicle expenses 8,500
Sundries 2,000
Total 107,500
Surplus 3,200
Family balance sheet
Financial year ending June 2016
Assets $ $
Family house 663,400
Boat 19,400
Car Jenny 35,000
Car Jerry 12,000
House contents 48,500
Commonwealth Bank shares 52,500 Term deposit with Bundoora 165,000
Savings account with Bundoora 26788
Superannuation funds (combined) 362,230
Total 1,395,58
Liabilities
Family home mortgagee 224,600
Personal car loan 11,900
Credit card debt 6,000
Total 242,500
Net worth 1,152,658
The family's Tax Calculation
Financial year ending June 2016 $ $
Assessable income Jerry's Salary 108,150
Jenny's Termination payment 15,000
Fully franked dividend 2,729.5
Savings account 269
Term deposits 4,455 conservative fund 8,619 capital stable fund 5,622.75
Less Allowable deductions
Work related expenses 2,500
Total allowable deductions 2,500
Taxable income 173,585.8
Gross tax payable 52,173.45
Add Medicare levy (2%) 3,471.716
Net tax payable 55,645.15
Family 's Cash flow statement
Financial

Ifrs Vs Gaap : Statement Of Cash
IFRS vs GAAP Statement of cash flows 'Cash and cash equivalents' include certain short–term investments and, in some cases,
bank overdrafts. Like IFRS, 'cash and cash equivalents' include certain shortterm investments, although not necessarily the same
short–term investments as under IFRS. Unlike IFRS, bank overdrafts are considered a form of short–term financing, with
changes therein classified as financing activities. The statement of cash flows presents cash flows during the period, classified
by operating, investing and financing activities. Like IFRS, the statement of cash flows presents cash flows during the period,
classified by operating, investing and financing activities. The separate components of a single transaction are classified as
operating, investing or financing. Unlike IFRS, cash receipts and payments with attributes of more than one class of cash flows
are classified based on the predominant source of the cash flows unless the underlying transaction is accounted for as having
different components. Cash flows from operating activities may be presented using either the direct method or the indirect
method. If the direct method is used, then an entity presents a reconciliation of profit or loss to net cash flows from operating
activities; however, in our experience practice varies regarding the measure of profit or loss used. Like IFRS, cash flows from
operating activities may be presented using either the direct method or the indirect method. Like IFRS, if

Analyzing The Statement Of Cash Flows The Cash Flow Statement
The use and purpose of the Statement of Cash Flows The cash flow statement identify the sources of cash flowing into the
business and shows how they have been used over a period. Companies or users need to read this statement in conjunction with
trading and profit and loss accounting and balance sheet and also in the context of the statement in the previous year. (Cox,
2004) This statement provides a useful tool for analysing management decisions and strategy. It can reveal such things as the
amount of liquid funds generated from operating activities; the ways in which financing occurred and investment activities
during a period. This information can help companies or users to assess whether liquid funds generated are sufficient and
whether they have been raised and applied in an appropriate way. The importance of liquidity to a business is difficult to
overstate. It is not allow a profitable business to be forced to crease trading because it does not have enough liquid funds to meet
its maturing liabilities. (Atrill et al, 2001) The objective of International Accounting Standard 7 is require the provision of
information about the historical changes in cash and cash equivalents of an entity by means of a statement of cash flows which
classifies cash flows during the period from operating, investing and financing activities. The standard aim to give the financial
statements of the companies with a basis for assessing the ability of the entity to generate cash and cash

Statement of Cash Flows Essay example
Exhibit 1: Alpha Corporation
I. For each of the years on the Statement of Cash Flows:
1. What were the firm's major sources of cash? Sources of cash: Sales of depreciable assets and sales of discontinued operations
in 1990 and increasingly from operating activities, especially related to restructuring and other unusual items.
2. What were the firm's major uses of cash? Cash comes mainly from payment of debt and investments in depreciable assets.
3. Was cash flow from operations greater than or less than net income? Explain in detail the major reasons for the difference
between these two figures. The net income was negative from 1989 to 1991. The net income is negative due to the depreciation
costs. Operating ... Show more content on Helpwriting.net ...
Concluding, this company seems to be in crisis of undergoing a transition phase.
Exhibit 2: Beta Corporation
I. For each of the years on the Statement of Cash Flows:
1. What were the firm's major sources of cash? The main source of cash is A/R. In 1991 the company also gathered $23M
issuing stock.
2. Was cash flow from operations greater than or less than net income? Explain in detail the major reasons for the difference
between these two figures. The CFO was higher than net income in 1989 and 1990. In 1991, the CFO is lower than net income
due to a considerable increase in payments for income tax and suppliers and employees.
3. Was the firm able to generate enough cash from operations to pay for all of its capital expenditures? In 1989 and 1990 the
firm was able to generate enough cash flows to cover its capital expenditures. However, in 1991 the firm's capital expenditures
were 50% higher than CFO.
4. Did the cash flow from operations cover both the capital expenditures and the firm's dividend payments, if any? I could not
pinpoint any dividend payments in the statement.
5. If it did, how did the firm invest its excess cash? The firm used excess cash to pay off debt in 1990.
6. If not, what were the sources of cash the firm used to pay for the capital expenditures and/or dividends?

The Purpose Of The Cash Flow Statement
There is an old saying by Earl Wilson (2015) that states "Today, there are three kinds of people: the haves, the have–nots, and
the have–not–paid–for–what–they–haves" (p. 1). This saying also applies to businesses, and investors will try to identify which
category a company falls in as they conduct their research. Investors want to know they are committing their money to an
organization that can effectively manage its cash. Cash is the fuel within every organization. It is extremely important for every
executive, manager, and investor to understand the cash flow battle rhythm within their organization by utilizing the statement
of cash flow. Analyzing the statement of cash flow, will enable investors to determine if a company is effective at managing
their finances.
Purpose of the Cash Flow Statement
Cash inflow and outflow is a litmus test of a company's performance during a specific time frame. Cash is the lifeline of the
company and the availability or lack of cash is a clear indication of a successful or failing business for most financial analysts,
investors and company management. The statement of cash flow is the means used by many to view the cash movement within
an organization. According to Epstein (2014), "The purpose of the statement of cash flows is to determine how cash flowed into
and out of the company during a certain period of time" (p.156). This management tool can assist executives, financial managers
and stock holders identify the organization's

Focus Point Holding Berhad Cash Flow Statements
4. Critically discuss the group and company's statement of cash flows The preface to discuss the group and company's statement
of cash flow is clarify whether Focus Point Holding Berhad has fulfil its responsibility as a listed company to preparing its
annual reports in compliance with the Bursa Malaysia Listing requirements. The statement of cash flow in the annual report are
required to be prepared in accordance with the statutory requirements which is Malaysia Financial Reporting Standards (MFRS)
107.
Objective of statement of cash flow
Cash flow statements are usually used to determine the liquidity and solvency of one company. Hence, Focus Point Holding
Berhad details out the cash or cash equivalent inflow and outflow of the company ... Show more content on Helpwriting.net ...
(ii) Investing activities: acquisition and disposal of long–term assets and other investments not included in cash equivalent.
(iii) Financing activities: activities that result in the change in the size and composition of the contributed equity and borrowings
of the entity.
Reporting cash flows from operating activities
According to MFRS 107.18, an entity shall report its statement of cash flow by using either:
(i) Direct method, whereby major classes of gross cash receipts and gross cash payments are disclosed; or
(ii) Indirect method, whereby profit or loss is adjusted for the effects of transaction of a non–cash nature, any deferrals or
accruals of post or future operating cash receipts or payments, and items of income or expense associated with investing or
financing cash flows.
Focus Point Holding Berhad using indirect method in preparing statement of cash flow as it made adjustment on non–cash
transactions, deferrals of future receipts, accruals of future payments and items related to investing and financing.
Reasons of using indirect method in preparing statement of cash

Statement of Cash Flows Essay
Statement of Cash Flows
STATEMENT OF CASH FLOWS 1
The Statement of Cash Flows is a very viable and helpful resource. Decision makers use the Statement of Cash Flows in many
instances to assess the viability of a firm. Within the statement are many types of elements that are incorporated to create the
complete Statement of Cash Flows. Also within the statement is what is known as the inflows and outflows. In some cases,
activity notes may be incorporated to help complete such representations. To fully understand the Statement of Cash Flows one
must know the definition of it and what it in fact means. The Statement of Cash Flows is a change statement summarizing the
transactions that caused cash to change ... Show more content on Helpwriting.net ...
The cash flow statement has three components of cash flow which includes how cash enters and leaves a company such as
operating, investing and financing as mentioned above.
The Statement of Cash flows includes measuring the cash inflows and outflows caused by operations. Cash inflows include cash
received from: * Owners when sales are sold to them * Creditors when cash is borrowed through notes, loans, mortgages, and
bonds
Whereas cash outflows includes cash paid to: * Owners in the form of dividends or distributions
STATEMENT OF CASH FLOWS 3 * Owners for the reacquisition of shares previously sold * Creditors as repayment of the
principal amounts of debt (excluding trade payables that relate to operating activities)
The operations component of cash flow reflects how much cash is generated from a company's products or services. Generally,
changes made in cash, accounts receivable, depreciation, inventory and accounts payable are reflected in cash from operations.
The cash flow is calculated by making certain adjustments to net income by adding or subtracting differences in revenue,
expenses and credit transactions (appearing on the balance sheet and income statement) resulting from transactions that occur
from one period to the next. These adjustments are made because non–cash items

Statement Of Cash Flows. When Comparing Statement Of Cash
Statement of Cash Flows When comparing statement of cash flows between the two electronic companies, they both
compliment each other. This meaning where one company lacks the other makes up for. On the brief overview of the companies,
Apple looks to be the stronger company. Their net income over the last three years almost doubles Microsoft net income in the
same period of time. Both companies keep a steady depreciation rate over the three year time frame. Neither company takes a
drastic dip or varies more than about a million dollars. The only difference is
Microsoft spends less in depreciation each year, coming in about four million dollars lower than what Apple spends yearly. This
could be caused by multiple things. Microsoft is a ... Show more content on Helpwriting.net ...
Apple generates revenues from product sales, subscription fees associated with iCloud and Apple Music, and extended warranty
fees for its products. Apple also generates revenues from the fees charged to content owners and application developers for
selling their digital content and applications through the iTunes Store, App Store, Mac App Store, iBook's Store, and Apple TV
App Store.
The current ratio helps investors and creditors understand the liquidity of a company and how easily that company will be able
to pay off its current liabilities. This ratio expresses Apple and Microsoft current debt in terms of current assets. Therefore, in
2016 Microsoft's current ratio was 2.35 means that the Microsoft has 2.35 times more current assets than current liabilities.
However, Apple is current debt in terms of current assets. Is only 1.35 that the Microsoft has 1.35 times more current assets than
current liabilities. A higher current ratio is always more favorable than a lower current ratio because it shows the company can
more easily make current debt payments.
Figure 1
Figure 2
Higher quick ratios are more favorable for companies because it shows there are more quick assets than current liabilities. In
2016, Apple with a quick ratio of 1.22 indicates that quick assets equal current assets. This also shows that

Cash Flow Statement
Cash Flow Statement:
A cash flow statement is a financial report with information on the sources of a firm's cash and how it was spent within a given
period of time. In contrast to other financial reports, a cash flow statement does not present information on non–cash items like
depreciation. As a result, the cash flow statement is beneficial in analyzing the temporary feasibility of a company, especially its
capability to pay bills. Many analysts recommend entrepreneurs to study a cash flow statement quarterly because of its
importance for small and large businesses.
Since a cash flow statement classifies cash receipts and payments based on operations, investments, and financing activities, it's
categorized into these three functional sections within the business. Therefore, the major parts of the cash flow statement are
cash–related operations, investments, financing, and net increase or decrease in cash. While cash from operations is cash
generated from a firm's daily operations, the investing cash is generated from assets' investments. On the other hand, financing
cash is paid or received from the issued or borrowed funds whereas net increase or decrease in cash is from annual rise or
reduction in cash. It's important to note that regardless of the slight differences in cash flow statements, they all present financial
information in all the four categories ("Cash Flow Statement", n.d.).
One of the major advantages of a cash flow statement is that it provides

Analyzing The Cash Flow Statement
Analysing the cash flow statement would be a great place to first look when initially analysing a company. It is difficult for a
company to manipulate the cash flow statements resulting in a honourable place to find the actual numbers. The cash flow
statement is indicative of how well the company can convert net income into cash; it also helps to determine if a company is
strong or weak. Panera realizes a positive net cash flow and is a strong company from their statements. To receive a deeper
analysis, the three sections of the cash flow statements, cash flows from operations, cash flow from investing and cash flow
from financing should be dissected. In the first section of cash flows from operations (CFO), Panera has had a strong and
positive growth in cash flow from their operations from 2010–13 with a slight drop in 2104 due to the fact their net income
decreased in 2014. During all five years, Panera stands in a upright position as their CFO is greater than net income. A ratio can
be computed to see how high the quality of net income is by adding net income with deprecation dividing by the CFO shows
that outside of 2010, net income proves to be of high quality. From the years 2011–2014 this ratio hovers around 90%, while in
2010 this ratio falters to 75% due to a high level of cash generated in accrued expenses. Although the net income remained high
quality in 2014 it is concerning that figured dropped due to an increase in expenses.
Cash flow from investing

Statement Of Cash Flow Analysis
Statement of Cash Flow Analysis After having analyzed the statement of cash flows from the 2011 and 2012 financial
statements, it is clear that Tesu SZZ d.o.o. is inaccurately recording their assets, liabilities, and shareholders equity. However,
their financial stability is not the only issue at hand. Their net income and net cash flow are both negative, therefore, it is clear
that the product of this statement will not have a positive outcome.
The statement of cash flows commences with a negative net income. That, in addition to the increase in accounts receivables
during the year, results in a negative cash flow from operating activities. Although Tesu reduced their inventory by a
significantly large amount, held back on their ... Show more content on Helpwriting.net ...
Financial Ratios Analysis In analyzing Tesu SSZ d.o.o., financial ratios were used as a tool to examine their financial
statements. The categories of liquidity, efficiency, solvency and profitability were used, as seen in Exhibit 2. Although there are
no industry averages to compare Tesu's financial ratios against, the two years of data from 2011 and 2012 can be compared
against each other to draw conclusions about the current financial situation.
Liquidity
In order to understand how Tesu meets cash requirements quickly, it is necessary to review the current ratio and quick ratio. The
higher liquidity is generally better as it demonstrates that the company can repay its lenders. As seen in Exhibit 2, the current
ratio is positive. However, it is decreasing from 2011 to 2012. Although the quick ratio increased slightly between the two years,
it is still not at an acceptable level. The company's liabilities are greater than their current assets due to the high costs of
accounts payable, which has resulted in the low ratio numbers. Currently, Tesu has a significant sum of money owed in terms of
unpaid wages and payroll taxes to the government. In order to increase liquidity, the company must increase its current assets.
Generally acceptable levels for liquidity are 2.0+ for current ratio, and 1.0+ for quick ratio. As Tesu continues to grow in 2013,
their current liabilities will begin to go down as they collect outstanding

Cash Flow Statements Of Yum Brands, Inc.
This paper reviews the Cash Flow Statements of Yum Brands, Inc., Panera Bread, and Starbucks documented by case study 10–
10 in our textbook for the purpose of analyzing financial health based on cash flow data. (Gibson, 2013).
Cash Flow Data (Case 10–10)
Table 1 replicates provided case 10–10 Cash flow data for companies Yum Brands, Inc., Panera Bread, and Starbucks (Gibson,
2013).
Data Reviewed Yum Brands, Inc. Panera Bread Starbucks 2010 2009 2010 2009 2010 2009
Net cash provided by operating activities 1.968B 1.404B 237.63M 214.90M 1.705B 1.389B
Net Income – including noncontrolling interests 1.178B 1.083B 111.60M 86.85M 0.948B 0.392B
Operating cash flow/current maturities of long–term debt 2.92 23.80 None None None None
Operating cash flow/total debt 30.57% 23.27% 72.23% 89.50% 63.06% 55.12%
Operating cash flow per share $4.05 $2.91 $7.68 $6.94 $2.23 $1.86
Operating cash flow/cash dividends 4.78 3.88 None None 9.97 None
Table 1
Net Cash (Operating Activities) versus Net Income
Net income is total revenues minus total expenses incurred to generate those revenues all within the same reporting period. Net
income is calculated by the accrual accounting methodology meaning that the expenses incurred to generate revenues are
reported at the same time the related revenues are reported. Both revenue recognition and expenses paid may not coincide with
actual cash transactions. Net cash from operating activities, on the other hand, is not determined by accrual but by

Chapter 12 the Statement of Cash Flows
CHAPTER 12
THE STATEMENT OF CASH FLOWS
OVERVIEW OF EXERCISES, PROBLEMS, AND CASES
Estimated Time in
Learning Outcomes Exercises Minutes Level
1. Understand the concept of cash flows and accrual accounting, 15* 60 Diff and explain the purpose of a statement of cash
flows.
2. Explain what cash equivalents are and how they are treated on 1 5 Easy the statement of cash flows. 12* 10 Easy
3. Describe operating, investing, and financing activities and give 2 10 Easy examples of each. 3 10 Mod 12* 10 Easy 13* 10
Easy 14* 25 Diff
4. Describe the difference between the direct and the indirect method of computing cash flow from operating activities.
5. Use T accounts to prepare a ... Show more content on Helpwriting.net ...
The purpose of the statement of cash flows is to summarize an entity's cash flows from operating, investing, and financing
activities during a period. Because it is concerned with activity for a specific period of time, the statement is similar to the
income statement. However, they differ in two important respects. First, with a few exceptions, the income statement deals only
with operating activities. Second, the income statement is on an accrual basis, while the statement of cash flows reports
operating activities on a cash basis.
2. A cash equivalent is an item that is readily convertible to a known amount of cash and has an original maturity of three
months or less. These items, such as Treasury bills and money market funds, present very little risk to the holder, and therefore
they are included with cash for the purpose of preparing the statement of cash flows. That is, purchases and sales of cash
equivalents are not considered significant activities to be separately reported on the statement.
3. The down payment of $20,000 is a cash outflow that would be reported in the investing activities section of the statement of
cash flows. The issuance of the promissory note for $60,000 would appear in a supplemental schedule of noncash investing and
financing activities.
4. A 60–day Treasury bill would be classified as a cash equivalent and combined with cash on the balance sheet. Therefore, the
purchase of the treasury bill would not be

Cash Flow Statement
Statement of Cash Flows Paper
The Statement of Cash flows is a very useful financial statement that can benefit investors, managers and even auditors. The
statement of cash flows has not been around as long as the other financial statements such as the balance sheet or income
statement. It basically "illustrates the way accounting evolves to meet the requirements of users of financial statements."
(Marshall, 2003) The statement of cash flows is designed to provide important information about the cash that a company has
received or has paid out during a certain time period. It provides a reason for the changes of cash received and paid by a
company by taking into ... Show more content on Helpwriting.net ...
Investors will be interested in this because they will be able to decide whether or not it is worth it to buy shares of the company.
Managers benefit from this statement because they are able to see whether the company is making money and whether the
company's performance is improving. They can also use this to decide how they may improve the out put of the company, what
changes need to be made. Auditors are able to use the statement of cash flows to see exactly what a company did with their
money. They are able to dissect where the company received money from, where it invested its money, and what operations the
company took part in. So the statement of cash flows is useful for many different people who are involved in a corporation.
Management of a company would probably be most interested in viewing the Operating Activities section of the Statement of
Cash Flows. This section pinpoints the exact inventories, liabilities, depreciation and receivables of the company during a
certain time period. So managers are able to see what operations are occurring, what type of inventory is on hand and what the
assets and liabilities of the company are.
An auditor would be interested in the above section, but just as important would be the Investing and Financing Activities
sections. Auditors need to know where the company invested its money and where it received its money in order to figure out
whether

Financial Statements Analysis : Cash Flow
Introduction
The financial statements analysis is very important to various users because it helps to express the overall financial health of the
organization (Megan, Hategan, Caciuc, & Cotlet, 2009). Managers use the cash flow statements to determine the cash generated
by the operating, investing and financing activities (Gibson, 2013). The statement of cash flow is a step by step presentation of
cash inflows and out flows from the company's operating, investing and financing activities, more so the statement demonstrates
liquidity of an organization (Öztürk, 2015). The cash flow statement should report all transactions that affect cash flow.
Investors and creditors are interested in the cash flow statement because are able to determine how much capital should be
raised for investment, or if the company is able to meet its debt and pay dividends (Gibson, 2013). If no actual cash changes
hands in a particular transaction, then the Cash flow statement does not change. This study presents a comprehensive description
of the components of the statement of cash flows, the two alternative methods used to present the statement of cash flow, and a
comparison between two cash flow statements of two companies; Nike and Tech Data Corporation.
Methods of the Cash Flow Statement
Cash is the most important asset that a company may own, it is usually known to be in form of coins and notes (Foster III, Kevin
McNelis, & Smith, 2012). The statement of cash flows was first introduced in 1987

Examples Of Cash Flow Statement
The first thing to know about the cash flow statement is its division into three separate sections. A cash flow statement looks at
three components of core operations, investing, and financing in order to come to the final conclusion.
One of the major distinctions in a cash flow statement, compared to income statement and balance sheet, is the lack of reporting
on future incoming and outgoing cash. Furthermore, some of the things you won't know in a loss and profit statement, but which
feature at the cash flow statement include:
Owner's draws out of the business
Payment of credit card principal
Payment of loan principal
A cash flow looks at only the movements in the three sectors during the determined period, not what is going to happen ... Show
more content on Helpwriting.net ...
You can see all the different sections and how the figures are calculated. As you can see, the bottom of the statement shows the
total cash flow of the company for the accounting period.
The above example statement shows you the company total cash flow, as well as where majority of the liquidity came from.
Naturally, not all cash flow statements show a positive cash flow. But it is important to remember that a negative cash flow
doesn't necessarily mean the business is failing. Sometimes a negative cash flow is part of a company's decision to heavily
invest in new inventory, for example, which might increase the cash flow the following year. Therefore, as mentioned, you need
to use a cash flow statement as part of your financial analysis, but not rely solely on it.
Overall, you also want to compare your cash flows from different periods. While a single negative cash flow statement might
not signal trouble, if your cash flow is constantly on the negative, your business is clearly having liquidity problems. It usually
means the business is having difficulties paying debt and relies too much on

A Study of Cash Flows Statement
I. Introduction
The purpose of this paper is to present and explain the statement of cash flows by incorporating the statements No. 95, 102 and
104 that establish standards for cash flows reporting issued by FASB[i].
FASB Statement No. 95 (FAS 95) "Statement of Cash Flows" supersedes APB Opinion No. 19, Reporting Changes in Financial
Position, and requires a statement of cash flows as part of a full set of financial statements for all business enterprises[ii] in place
of a statement of changes in financial position and classify cash receipts and payments according to whether they stem from
operating, investing, or financing activities and provides definitions of each category.
FASB Statement No. 102 (FAS 102) amends FAS 95, to exempt ... Show more content on Helpwriting.net ...
Examples of items commonly considered to be cash equivalents are treasury bills, commercial paper, money market funds, and
federal funds sold (for an enterprise with banking operations). Cash purchases and sales of those investments generally are part
of the enterprise 's cash management activities rather than part of its operating, investing, and financing activities, and details of
those transactions need not be reported in a statement of cash flows.
An enterprise shall establish a policy concerning which short–term, highly liquid investments that satisfy the said definition of
cash equivalents. For example, an enterprise having banking operations might decide that all investments that qualify except for
those purchased for its trading account will be treated as cash equivalents, while an enterprise whose operations consist largely
of investing in short–term, highly liquid investments might decide that all those items will be treated as investments rather than
cash equivalents. An enterprise shall disclose its policy for determining which items are treated as cash equivalents. Any change
to that policy is a change in accounting principle that shall be affected by restating financial statements for earlier years
presented for comparative purposes.
IV. Gross and net cash flows
Generally, information about the gross amounts of cash receipts and cash payments during a period is more relevant than
information about the net amounts of cash receipts

Accrual Balance And Cash Flow Statement
Question 1
I would explain these methods (accrual balance and cash flow statement), to Irene in this way:
The most of the time the business bookkeeping system use two methods: the accrual basis or the cash basis (Gibson 2008).
On one hand, "Accrual accounting " is any record of revenues or expenditures when there is not a cash transaction. The principle
to apply this method is the "matching principle"( Berman& Knight, 2013), basically is the report of an expense or income
statement in the equivalent period that is by matching revenues to expenses. It measures the performance when cash transactions
occur.
This method provides a precise picture of the company statement, but by his complexity is more expensive to apply. In addition,
the Enterprise using inventory, as well as, sales or credit must to use this method. Furthermore, the financial condition is
affected by transaction as credits or projects and, these statements have to be reflected in the accounting balance.
Moreover, Accrual accounting in opposite to the cash flow (that will be explained on the next item) reflects facts not
probabilities, as an instance is the sales of a product, when a customer receive a product by the credit system accrual accounting
reflects the transaction as a fact in the account " accounts receivable" , making an increase on the seller's revenue.
As said above, accrual accounting is the most precise representation of the financial results and the enterprise financial position,
being

Analyzing The Balance Sheet Of Isaleh And The Related...
EXECUTIVE SUMMARY The purpose of this report was to analyze the balance sheet of Isaleh and the related Income
Statements and cash flows for the year ended 31st December 2014. Specific objectives were to give Babs Lee an understanding
of why there is an Income Statement as well as a Cash Flow Statement, what Working Capital is and why it is important and to
give an understanding of what a credit sale is in business context. This report recommends strategies to help Babs Lee
understand the financial statements of the business.
Table of Contents
EXECUTIVE SUMMARY 2
1. INTRODUCTION 4
2. DISCUSSION 5
2.1 Why the income statement is prepared using the accrual basis of accounting and how it differs from cash accounting 5
2.2 What working capital is and why it is important to manage it 6
2.3 what is a credit sale is and why isaleh sales ukuleles on credit and the costs associated 7
3. CONCLUSION 8
REFERENCES 9
1. INTRODUCTION
This report was commissioned by Babs Lee, the owner of Isaleh. Its purpose is to analyze and give Babs Lee an understanding
of the financial statements and credit sales.
Isaleh is a wholesale business that sells Ukuleles to music shops throughout New Zealand. Babs Lee's Uncle passed away and
left the wholesale business to her. However, the executor of the will, R. Senior provided her the latest financial statements but
Babs Lee lacks an understanding of the financial statements, why an Income Statement in needed as well as a Cash Flow
Statement,

Financial Statements Of A Business Entity
A Glimpse at the Financial Statements of a Business Entity Financial statements are important tools that are used by owners,
managers, and investors of a company in order to analyze profitability as well as where money is being spent and where it is
coming from. In order to explain further about how the financial statements are utilized, I have provided a brief breakdown of
the income statement, the balance sheet, and the statement of cash flows.
Income Statement
The main purpose of the income statement is to provide information to the investors, owners, and managers of the business
about the revenue and expenses produced by the company for a period of time. The statement is usually issued quarterly or
yearly depending on the business (Melicher & Norton, 2013). The major expenses that are found on an income statement are:
cost of goods sold, operating expenses, taxes, and miscellaneous expenses.
Cost of Goods Sold Cost of goods sold consists of any expenses that occur from the direct production of the goods or services.
These expenses can be further broken down to include the cost of material, labor, and overhead. Material is just that, anything
that makes up the product. The labor consists of the man–power used in the production of the goods or services. Overhead can
included things like electricity, rent, utilities, supplies, etc.
Operating Expenses Operating Expenses are expenses that are not directly related to production of the goods or services. Sales
and

Tata Motors Cash Flow Statement

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