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Statement of Cash Flows Study Objectives

Statement of Cash Flows Study Objectives Indicate the primary purpose of the Statement of cash Flows . Distinguish among operating, investing, and financing activities. Explain the impact of the product life cycle on a company's cash Flows . Steps in the Preparation of the Statement of Cash Flows Prepare a Statement of cash Flows using one of two approaches: (a) the indirect method or (b) the direct method. Use the Statement of cash Flows to evaluate a company. Chapter Outline Study Objective 1 - Indicate the Primary Purpose of the Statement of Cash Flows Study Objective 2 - Distinguish Among Operating, Investing, and Financing Activities 1.

2. Illustrating the Types of Cash Inflows and Outflows a. Operating activities i. Cash Inflows: 1. From sale of goods or services. 2. Returns on loans (interest received) and on equity securities (dividends received). ii. Cash outflows: 1. To suppliers for inventory. 2. To employees for services. 3. To government for taxes. 4. To lenders for ...

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