Cash flow statement

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Cash flow statement

  1. 1. business builder 4how to prepare a cash flow statement zions business resource center
  2. 2. zions business resource center 2 how to prepare a cash flow statement What You Should Know Before Getting Started 3 Components of a Cash Flow Statement 5 How to Prepare a Cash Flow Statement 6 Constructing the Statement 10 How to Analyze a Cash Flow Statement 16 Checklist 18 Resources 18 Notes 19
  3. 3. what to expectWhat is a Cash Flow Statement? This Business Builder assumes that a
  4. 4. zions business resource center 4 An Overview ABC Wholesale Company Cash Flow Statement Cash Flow From Operations Net Income* $200 Additions (Sources of cash) Subtractions (Uses of cash) Net Cash Flow From Operations 165 Cash Flows From Investing Activities Cash Flows Associated with Financing Net Change in Cash (205)
  5. 5. Operating ActivitiesInvesting ActivitiesFinancing ActivitiesIncome Flows and Cash Flows
  6. 6. zions business resource center how to prepare a cash flow statement
  7. 7. Exhibit 1From the Roots Up Income Statement Sales $8,158 Gross Profit 3,263 Operating Profit 391 Net Income $269
  8. 8. zions business resource center Exhibit 2 From the Roots Up Comparative Balance Sheet Prior Year Current Year Balance Cash Source/ Activity 200X 200Y Change (Cash Use) Type Total Assets $2,455 $2,973 22 Totals Liabilities and Equity $2,455 $2,973
  9. 9. Table ICash Effects of Balance Sheet Account ChangesCash Inflow Cash Outflow Table IICash Flows by Activities Operating Activities Investing Activities Financing Activities Operating Activities Investing Activities Financing Activities Borrowed
  10. 10. zions business resource center Operating Activities The Direct Method Table III Cash Flows from Operating Activities Using the Direct Method — — other able —
  11. 11. Exibit 3From the Roots Up Statement of Cash Flows - Direct MethodNet Sales $8,158 Income Statement Change in Account Rec. Net (175) Balance Sheet Less Bad Debt Expense (33) Income StatementCash Collected From Sales 7,950Cost of Goods Sold (4,895) Income Statement Change in Inventories (177) Balance Sheet Change in Accounts Payable 89 Balance SheetCash Paid to Suppliers (4,983)Cash from Trading Activities 2,967 General and Administrative Expenses (2,839) Income Statement (less noncash expenses) Change in Accruals 10 Balance SheetCash from Operating Activities 138 Change in Other Assets/Liabilities 4 Balance SheetNet Cash From Operations $142 The Indirect Method
  12. 12. zions business resource center Table IV Cash Flows from Operating Activities using the Indirect Method Table V Cash Effects of Income Statement Account Changes Cash Inflow Cash Outflow
  13. 13. Exhibit 4 From the Roots Up Statement of Cash Flows - Indirect Method Net Profit $269 Non-Cash Changes Depreciation, Amortization 188 Change in Allowance for Bad Debt 4 Net Income Adjusted for Non-Cash Changes 461 Change in Accounts Receivable (179) Change in Notes Receivable (84) Change in Inventory (177) Change in Accounts Payable 89 Change in Salaries 10 Change in Other Short-Term Notes Payable 22 Net Cash Provided by Operations $142Investing Activities
  14. 14. zions business resource center Cash Flows From Investing Activities + Proceeds From Sale of Assets - Purchases of Property and Equipment = Total Net Cash Provided (Used) by Investing Activities Financing Activities Cash Flows From Financing Activities + Net Borrowing Under Line of Credit Agreement + Proceeds From New Borrowings - Repayment of Loans - Principal Payments Under Capital Lease Obligations - Dividends/Distributions/Withdrawals Paid + Proceeds From Issuance of Stock + Partner/Owner Capital Contributions =Total Net Cash Provided (Used) by Financing Activities
  15. 15. Cash Flow Statement Description 12 Month Period Net Sales $8,158 Change in Account / Notes Rec-Trade (Net) (208) Cash Collected From Sales 7,950 Cost of Sales / Revenues (4,895) Change in Inventories (177) Change in Accounts Payable-Trade 89 Cash Paid to Suppliers (4,983) CASH FROM TRADING ACTIVITIES 2,967 General and Administrative Expenses (Less Non-Cash Expenses) (2,839) Change in Accruals and Other Pay 10 Cash Paid for Operating Costs (2,829) CASH AFTER OPERATIONS 138 Change in Other Assets / Liabilities 4 Other Income (Expense) and Taxes Paid 4 Net Cash After Operations 142 Interest Expense (122) Dividends - Paid in Cash (137) Cash Paid for Dividends and Interest (259) NET CASH INCOME (117) Current Portion Long-Term Debt CASH AFTER DEBT AMORTIZATION (117) Change in Net Fixed Assets (32) Change in Investments (84) Cash Paid for Plant and Investments (116) FINANCING SURPLUS (REQUIREMENTS) (233) Change in Short-Term Loans / Other Payables 53 Change in Long-Term and Sub Debt (90) Change in Other Non-Current Liabilities 126 Change in Capital 198 Total External Financing 287 CASH AFTER FINANCING* 54 Add: Beginning Cash & Equivalents 169 Ending Cash Equivalents $223**
  16. 16. zions business resource center Operating Activities Investing Activities Financing Activities
  17. 17. Cash Flow Statement Worksheet Description 12 Month Period Net Sales Change in Account / Notes Rec-Trade (Net) Cash Collected From Sales Cost of Sales / Revenues Change in Inventories Change in Accounts Payable-Trade Cash Paid to Suppliers CASH FROM TRADING ACTIVITIES General and Administrative Expenses (Less Non-Cash Expenses) Change in Accruals and Other Pay Cash Paid for Operating Costs CASH AFTER OPERATIONS Change in Other Assets / Liabilities Other Income (Expense) and Taxes Paid Net Cash After Operations Interest Expense Dividends - Paid in Cash Cash Paid for Dividends and Interest NET CASH INCOME Current Portion Long-Term Debt CASH AFTER DEBT AMORTIZATION Change in Net Fixed Assets Change in Investments Cash Paid for Plant and Investments FINANCING SURPLUS (REQUIREMENTS) Change in Short-Term Loans / Other Payables Change in Long-Term and Sub Debt Change in Other Non-Current Liabilities Change in Capital Total External Financing CASH AFTER FINANCING* Add: Beginning Cash & Equivalents Ending Cash Equivalents
  18. 18. zions business resource center Operating Activities Investing Activities Financing Activities Cash Flow Analysis resources Books Cash Flow Analysis Healthy Business Guide, Websites The Trade Creditor’s Guide to the Statement of Cash Flows, www.crfonline.org/orc/cro/cro-10.html
  19. 19. notes______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
  20. 20. 310 S. Main, Mezzanine Salt Lake City, UT 84101 Phone - 801.594.8245 www.resources.zionsbank.com®

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