economics notes by prof:muhammad irfan

2. CASH FLOWS ANALYSIS
MUHAMMAD IRFAN
Assistant Professor, Sarhad University, Peshawar.

3. THREE IMPORTANT FINANCIAL STATEMENTS
1. The Balance Sheet:
• Provides a snapshot view of a company’s assets and
liabilities
• The Balance Sheet is as of a particular date.0
2. The Income Statement
• Provides a summary of a firm’s revenues and expenses
• The Income Statement is over a specific accounting
period, usually a quarter or a year
3. The Cash Flow Statement
• Is an analysis of the sources and uses of cash by the firm
over an accounting period
• Summarizes operating, investing, and financing cash
flows

4. CASH FLOW STATEMENT
Cash flow
A summary of a firm’s payments during a period of time
This statement reports cash inflows and outflows based
on the firm’s
.
 Investment Cash Flow
 Financing Cash Flow
 Operating Cash Flows

5. CASH FLOW STATEMENT
 Investment Cash Flow
Includes any purchases or sales of fixed assets and
investments
 Financing Cash Flow
Includes funds raised by issuing securities, or expended by
repurchasing outstanding securities.
 Operating Cash Flows
Shows impact of transactions

6. CASH FLOW FROM INVESTING ACTIVITIES
Cash Inflows
 From sale of fixed assets
 Property
 Plant
 Equipment.
 From sale of debt or equity securities
Cash Outflows
To acquire fixed assets
 Property
 Plant
 Equipment.
 To purchase debt or equity securities

7. CASH FLOW FROM FINANCING ACTIVITIES
Cash Inflows
 From borrowing
 From the sale of the firm’s own equity securities
Cash Outflows
 To repay amounts borrowed
 To repurchase the firm’s own equity securities
 To pay shareholders dividends

8. CASH FLOW FROM OPERATING ACTIVITIES
 Total sales of goods and services collected
during a period;
 Payments made to suppliers of goods and
services used in production settled during a
period;
 Payments to employees or other expenses
made during a period.

9. Thank You…