Discuss and provide examples of different types of cash flows as operating, investing, and financing activities.

Discuss and provide examples of different types of cash flows as operating, investing, and financing activities.

Solutions

Expert Solution

Cash flow Statement is showing change in cash position of the company from one period to another.

Cash flow statement is divided into 3 category.

1. Operating Activity:

Operating Cash flow is showing cash flow of the company from revenue producing activities of the company and other activities that are not investing or financial activities.

Example of Cash flow from activities are.

a) Cash receipt from the sale of goods and the rendering service.

b) Cash receipt from fees, communication and other revenue.

c) Cash payment to suppliers for goods and services.

d) Cash payments to employee etc.

2. Investment Activity:

Cash flow from Investment Activities include acquisition and disposal of long term assets and other investment activity.

a) Cash payment to purchase fix assets including intangible assets like goodwill, patents etc.

b) Cash received from disposal of assets.

c) Interest received on investment in debenture and bonds.

d) Dividend received on investment in shares.

3. Financing Activities.

These are activities that shows flow of net cash flow that are used to fund the company.
It shows change in shareholders funds.

a) Cash proceed from issue of shares or other similar instruments

b) Cash proceeds from issue of Debenture, loan, notes , bonds and other long term borrowing.

c) cash repayment to debenture.

d) Buyback of shares.

e) dividend payments etc.

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Explain the value of separating cash flows into operating activities, investing activities, and financing activities to...

Explain the value of separating cash flows into operating activities, investing activities, and financing activities to financial statement users in analyzing cash flows and the company's financial performance and condition.

Q1. Discuss the differences between operating, investing and financing activities, then describe the cash flows between...

Q1. Discuss the differences between operating, investing and financing activities, then describe the cash flows between a company and its stakeholders Q2. ALHAMD Watch Company manufactures two product lines—digital watches and analog watches. Income statement data for the most recent year follow: Total Digital Watches Analog Watches Sales revenue $850,000 $500,000 $350,000 Variable expenses (530,000) (250,000) (280,000) Contribution margin $320,000 $250,000 $70,000 Fixed expenses (180,000) (90,000) (90,000) Operating income (loss) $140,000 $160,000 $(20,000) Assuming fixed costs remain unchanged, and that...

The statement of cash flows begins with the Financing activities section. Operating activities section. Investing activities...

The statement of cash flows begins with the Financing activities section. Operating activities section. Investing activities section. Last year's ending cash balance. In which section of the statement of cash flows each item would be reported? Paid cash for office supplies (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Paid cash for a computer (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Distributed cash dividend (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Received cash for services (Click to select)Operating ActivitiesInvesting ActivitiesFinancing Activities Purchased treasury stock...

1. Differentiate between investing activities, operating activities and financing activities. Please provide examples of each in...

1. Differentiate between investing activities, operating activities and financing activities. Please provide examples of each in your answer. 2. Discuss and explain the difference between a vertical analysis and a horizontal analysis. Which method do you feel is better?

Differentiate between investing activities, operating activities and financing activities. Please provide examples of each in your...

Differentiate between investing activities, operating activities and financing activities. Please provide examples of each in your discussion.

Briefly discuss Sims Metal Management Limited’s net cash flows from operating, investing, and financing activities and...

Briefly discuss Sims Metal Management Limited’s net cash flows from operating, investing, and financing activities and the trends evident over the last three years: 2019, 2018, 2017. Refer to their annual report.

Discuss the three business activities of financing, investing, and operating.

Discuss in what ways the operating, investing and financing cash flows of a growing firm might...

Discuss in what ways the operating, investing and financing cash flows of a growing firm might be different from those of a contracting firm. Present your views in maximum 200 words. b. Discuss why the effective interest method to amortize bonds premiums or discounts is preferable to straight line method. Present your views in maximum 200 words.

Classify the following cash flows as either operating, investing, or financing activities assuming indirect method. Received...

Classify the following cash flows as either operating, investing, or financing activities assuming indirect method. Received cash interest on a note Paid cash interest on outstanding notes Received cash dividends from investments Paid accounts payable with cash Sold stock investments for cash Paid cash for a building Cash paid to purchase long-term investments Received cash from long-term debt issuance Received cash from short-term debt issuance Received cash payments from customers

Explain whether the expected net cash flows from the three activities (operating, investing, financing) would be...

Explain whether the expected net cash flows from the three activities (operating, investing, financing) would be in flows or outflows.

Subjects