Cash flow statement

What is the purpose of the cash flow statement?

• To measure the cash flows between a company and its owners
• To measure the cash flows between a company and its creditors
• To measure the cash inflows and outflows of a company over a period of time
• To measure the cash inflows and outflows of a company at a point in time

How is cash flow from operations typically measured?

• Net income + depreciation
• Net income + amortization
• Net income + both depreciation and amortization
• Total assets - total liabilities

What does the cash flow from investing activities typically include?

• Financing activities with shareholders and creditors
• Acquisition of property, plant and equipment
• Dividend payments made to shareholders
• Revenue from sales

What does the cash flow from financing activities typically include?

• Inflows and outflows of cash used to finance a company
• Acquisition of property, plant and equipment
• Sales of stocks and bonds to investors
• Investment in plant, property and equipment

What is the net change in cash for a period?

• Net income + amortization
• Cash flow from operations - cash flow from investing activities
• Cash flow from operations + cash flow from financing activities
• Cash flow from operations + cash flow from investing activities

What is free cash flow?

• Net income - dividends
• Cash flow from operations - capital expenditures
• Cash flow from operations - cash flow from financing activities
• Cash flow from operations - cash flow from investing activities

What is an example of a non-cash item?

• Amortization
• Depreciation
• Pensions
• Inventory

What is an example of a cash item?

• Investment in plant, property and equipment
• Depreciation
• Pensions
• Interest paid

What is the purpose of cash flow forecasts?

• To plan for the expected cash flows of a business
• To measure the cash inflows and outflows of a company over a period of time
• To measure the cash inflows and outflows of a company at a point in time
• To measure the cash flows between a company and its owners

What is the difference between cash flow from operations and cash flow from investing activities?

• Cash flow from operations is cash generated from the core operations of a business while cash flow from investing activities are payments made to acquire long-term assets
• Cash flow from operations is cash generated from the core operations of a business while cash flow from investing activities are payments made to creditors
• Cash flow from operations is cash generated from investments while cash flow from investing activities are payments made to acquire long-term assets
• Cash flow from operations is cash generated from investments while cash flow from investing activities are payments made to creditors