MGT120H5 Chapter 12: Chapter 12
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MGT120H5 Full Course Notes
Verified Note
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Document Summary
Statement of cash flows allows managers to: predict future cash flows, evaluate management decisions, determine ability to pay dividends/interest, assess relationship of ni to cash flows and compare the operating performance of different companies. On a cash flow statement, cash = cash & cash equivalents (3-month investments, treasury bills) Operating activities: main revenue producing activities that result from sale of goods or cash payments to suppliers. Investing activities: purchase & sale of long term assets/investments that don"t qualify as cash equivalents (only expenditures related to assets on b/s qualify as investing activities) Financing activities: changes in size/compositon of contributed equity/borrowings: issuance/acquisition of shares, payment of dividends, cash proceeds from loans/bonds/notes, repayment of amounts borrowed (short/long term borrowings) indirect method, ni is adjusted for non-cash transactions, deferrals, accruals, income, expenses. Adjustments to reconcile net income to net cash provided by (used for) operating activities. Net cash provided by (used for) operating activities. Net cash provided by (used for) investing activities.
