BUS 251 Chapter Notes - Chapter 5: Cash Flow Statement, Money Market Fund, Cash Flow

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Cash low statement: explains the next change in company"s cash posiion during an accouning period. Info in cash low statement enable user to retrospecively: Assess company"s ability to generate cash lows from operaions. Evaluate where cash has come from: debt or equity. Assess level and types of capital assets investments. Determine how much cash was used to repay debt. Info in cash low statement enable user to prospecively: Assess company"s ability to repay debt in the future. Evaluate potenial for dividend payment in the future. Esimate company"s future cash requirements and cash structure. Income statement uses accrual accouning so the revenues and expenses do not correspond to the company"s cash lows. Is focuses just on operaing, but cash low focuses on invesing and inancing aciviies too. Cfs explains the changes in key account balances. Related to sales of goods/services: posiive cash low from normal operaions.