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Statement of cash flows preparation - Coggle Diagram
Statement of cash flows preparation
1 Operating section
Asset :arrow_up:
= CASH OUTFLOW (opposite)
Asset
:arrow_down: = CASH INFLOW (opposite)
Liability
:arrow_up: = CASH INFLOW (same)
Liability
:arrow_down: = CASH OUTFLOW (same)
Net income
ADD depreciation
:small_red_triangle: Accounts receivable (A)
:small_red_triangle: Inventory (A)
:small_red_triangle: Prepaid expenses (A)
:small_red_triangle: Accounts payable (L)
:small_red_triangle: Accrual expenses (L)
:small_red_triangle: Interest payable (L)
NCF operating section
Cash collected from customers - cash paid for g's / s's
2 Investing section
Long term of the BS
Marketable securities
:small_red_triangle: PPE cost
IA
Investments
NCF investing section
Do NOT
include:
:small_red_triangle: in acc depreciation
Net PPE focus on GROSS PPE
Cash received from sale of PPE & IA & Inv - Cash paid for purchases of PPE & IA & Inv
3 Financing section
:small_red_triangle: repayment of LT Debt
:small_red_triangle: Issuance of common stock
MINUS Dividends
NCF Financing section
Next change in cash (add all sections up)
Beginning balance (Cash at beginning year)
End balance (Cash beginning + change)
Long term debt + equity of the BS
Cash received from issue of common stock - cash paid for dividends & repayment of debt & repurchase of common stock
BUILT IN CHECK
Bottom line should = cash shown on BS always
Intangible assets
:small_red_triangle: IA goes in Investing section
ALWAYS ADD the ammortization expense to the IA
Don't look at Acc depreciation as already added in operations section