MGMT 20000 Study Guide - Final Guide: Net Income, Current Liability, Asset Turnover

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Kim Fatten

Document Summary

Inflows and outflows of cash resulting from the external financing of a business. Information sources for preparing the statement of cash flows. Cash flow activities: operating activities expense activities. Investing activities current investment: financing activities. Income statement: balance sheets, detailed accounting records. There was no cash but you have a significant transaction. Begin with net income and then list adjustments to net income in order to arrive at operating cash flows. Adjust the items on the income statement to directly show the cash inflows and outflows from operations. Preparing the statement of cash flows. Adjustments for noncash effects: depreciation expense, gain or loss on sale of an asset. Changes in current assets and current liabilities. Increase in a current asset: + decrease in a current asset, + increase in a current liability. Learning objective 3: prepare the investing activities section and the financing activities section of the statement of cash flows. Increase or decrease in investments.