Cash Flow Statements Flashcard

Front

What are cash flow statements used for?

Back

To show the inflow and outflow of cash within a business over a specific period of time.

Front

Which of the following activities is included in the operating activities section of a cash flow statement? Cash payments to suppliers, Dividends paid to shareholders, Cash receipts from customers, Interest received from investments

Back

Cash receipts from customers

Front

What type of activities are included in the investing activities section of a cash flow statement?

Back

Acquisition and disposal of long-term assets and investments in securities

Front

Which of the following activities is included in the financing activities section of a cash flow statement?
Issuing or repurchasing of company stock, Paying employee salaries, Purchasing inventory, Selling products to customers

Back

Issuing or repurchasing of company stock

Front

What does a positive cash flow from operating activities indicate?

Back

The company is generating more cash than it is using to run its core business operations.

Front

What does a negative cash flow from investing activities indicate?

Back

The company is spending more money on investments than it is receiving.

Front

What does a positive cash flow from financing activities indicate?

Back

The company is generating more cash from its financing activities than it is spending.

Front

What is the formula to calculate cash flow from operating activities?

Back

Net Income + Depreciation/Amortization + Changes in Working Capital

Front

Why is the cash flow statement important for investors and creditors?

Back

It provides information about the company's ability to generate cash and its liquidity.