How do you calculate/find the information on a balance sheet and or income statement of "sale...

How do you calculate/find the information on a balance sheet and or income statement of "sale of new stock", "dividend" and "net cash flow" that would be recorded on a statement of cash flow?

Expert Solution

I will be finding the information on the balance sheet or income statement of sale of new stock by-

A) Increase in the issued security and number of outstanding shares in the balance sheet, And I will also be counter checking it from asset side of the balance sheet as the cash which has been received on issue of shares will be making the the overall assets higher.

B. Payment of dividend will be included in the statement of the cash flows on the the cash flows of financing activity because dividend is not treated at their operational activity and it is treated as financing activity so it will be reduced from financing activities.

Dividend may also be recorded in the the income statement by being treated as an expense.

C. Net cash flows will be calculated after payment of all the cost related to the the operations of the company along with the interest cost and this will also be including other payments to preference shareholders in form of dividend so the left out cash flows for the equity share holder will be considered net cash flows.

The net cash flows can also be found out from cash and cash equivalents on the Asset side of the balance sheet.

This net cash flows can be calculated after ascertainment of cash flow from operating activities and cash flows from investing activities and cash flows from financing activities together.

jeff jeffy answered 2 years ago

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