What are the differences between cash from operating activities, cash from investing activities, and cash from...

What are the differences between cash from operating activities, cash from investing activities, and cash from financing activities

Expert Solution

Cash flow from operating activities is a section of the cash flow statement that provides information regarding the cash-generating abilities of a company's core activities.

Examples of Cash flow from operating activities

Cash Receipts from Customers

Cash payments for Operating Expense

Cash payment to suplliers

Cash flow from investing activities is an item on the cash flow statement that reports changes resulting from amounts spent on investments in capital assets such as plant and equipment, investments.

Ex of Cash flow from Investing activities

Sale of invt

Purchase of PPE

Sale of PPE

Financing activities - A category in a company’s cash flow statement that accounts for external activities that allow a firm to raise capital and repay investors, such as issuing cash dividends, adding or changing loans or issuing more stock.

Ex of Cash flow from Financing activities

Issue of Stock

Issue of additional Paid in capital

Dividends Paid

jeff jeffy answered 1 year ago

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...

A. A company has negative cash from operating activities, and negative cash from investing. Is the...

A. A company has negative cash from operating activities, and negative cash from investing. Is the cash from financing section likely positive or negative? Why? B. Company A has EBITDA of $3,000,000 with normalized capital expenditures of $2,000,000 per year. Company B has EBITDA of $3,000,000 with normalized capital expenditures of $500,000 per year. Which company will likely trade at the higher EBITDA multiple? Why? C. Assume that the company was purchased in 2016 for an 8x multiple using $8,400...

1] What is the relationship between net income and cashflow from operating, investing, and financing activities...

1] What is the relationship between net income and cashflow from operating, investing, and financing activities for a company.

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.

The three sections of the cash flow statement include operating activities, financing activities, and investing activities....

The three sections of the cash flow statement include operating activities, financing activities, and investing activities. The investing activities show funds that are flowing into the business which are generated by the primary business activity of the company. This is why investing activities are considered to be a report of the “lifeblood of the company”. Select one: True False

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...

Of which are these are operating, investing, financing, and non-cash activities? Purchase of furniture for cash,...

Of which are these are operating, investing, financing, and non-cash activities? Purchase of furniture for cash, deprecation expense, new long-term loan for operations, proceeds from sale of land, change in accounts payable, gain on sale of building, issuance of long-term notes payable, and conversion of bonds payable to common stock.

Cash Flows from Operating Activities—Direct Method The cash flows from operating activities are reported by the...

Cash Flows from Operating Activities—Direct Method The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $509,900 and accounts receivable decreased by $32,600 during the year, what was the amount of cash received from customers? $ b. If income tax expense for the current year was $44,200 and income tax payable decreased by $4,400 during the year, what was the amount...

Classify each cash transaction between Operating (O), Investing (I), or Financing (F) activities; and prepare...

Classify each cash transaction between Operating (O), Investing (I), or Financing (F) activities; and prepare the Statement of Cash Flow for Cougar Corp. using the following data: Cash at the beginning of the year: $600,000 Cash Receipts from: __Bank (Interest on CD) $3,000 __Customers Sales $875,000 __Interest $30,000 __Dividends $3,500 Cash payments for: __Dividends $2,000 __Raw Materials $ 3,000 __Wages Expense $4,000 __Land $10,000 __Interest $4,000

Classify cash inflows and outflows as relating to operating, investing, or financing activities.

Question