ADMN 2021H Chapter Notes - Chapter 13: Debt Service Coverage Ratio, Retained Earnings, Free Cash Flow
16 Mar 2017
School
Department
Course
Professor
Document Summary
Classification of cash flows: cash receipts and cash payments are classified into three categories, operating activities, investing activities, financing activities. Operating activities: cash effects of transactions that create revenues and expenses that enter into determination of profit. Includes relevant noncash current assets and current liabilities on the balance sheet: where the related account is an income statement account. Investing activities: purchasing and disposing of, long-term investments not held for trading, long-lived assets, lending money and collecting the loans, generally includes non-current asset items (e. g. long-lived investments, property, plant, and equipment) on statement of financial position. Preparing the statement of cash flows: step 1: prepare operating activities section, step 2: prepare investing activities section, step 3: prepare financing activities section, step 4: complete the statement of cash flows. Cash receipts from customers: the relationship among cash receipts from customers, revenues from sales, and changes in accounts receivable is:
