Business Administration 1220E Lecture Notes - Lecture 6: Retained Earnings, Cash Flow, Dr. Dre
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Business Administration 1220E Full Course Notes
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Statement of cash flow- identifies specific activities that provide or consume cash during a specific period of time. Operations- measures the cash flow associated with normal business activities. Financing- how much debt or equity has been acquired or retired over the year. Investing- outlines all cash movements relating to the acquisitions and disposals of non-current assets. Net cash flow- sum of the three components: operating, financing and investing activities. Financial ratio analysis- a useful financial management tool developed to assist in identifying, interpreting and evaluating changes in the financial performance and condition of a business over a period of time. Not all the items on the statement of earnings are cash-based. Preparing a statement of cash flow aids in revealing a company"s real financial standing. Should use short-term source to pay for short-term purchases and a long-term source should be used to pay for a long-term purchase.