البيانات المالية في ريادة الأعمال

Riyada Al-'Amal Wa Al-Ibkār (Entrepreneurship and Innovation)

• This is a topic for the year 2014 at the University of Jeddah.

Chapter Six: Cash Flow Statements

• This chapter (6) from 2014 focuses on cash flow statements at the University of Jeddah.

Understanding Cash Flow Statements

• Cash flow statements provide a realistic picture of business activities.
• They numerically represent information for decision-makers.
• It's the third financial statement after the balance sheet and income statement.
• It's crucial for enhancing business image.
• It's an integral part of financial data, required periodically by business administrations.
• It showcases the monetary impact of all activities during a financial period.
• It highlights whether cash flow is inward or outward.

Defining Cash Flows

• Cash flow is the difference between incoming and outgoing cash flows.
• It's a common term used by traders.
• Cash flow is categorized into activities with similar natures.
• This reveals strengths and weaknesses, like the business' capacity to generate enough cash for obligations, expansion, and short-term/long-term profit distribution.

Cash Flow Activities

• The statement displays cash receipts (collections) and payments (disbursements).
• Classified into three activities: Operating, Investing, and Financing.
• Shows the net change in cash over a specific period.

Importance of Cash Flow Statement Information

• Provides a clear view of cash flow performance to accountants, auditors, financial analysts, and financial data users.
• Balance sheets and income statements are also crucial, each highlighting a significant aspect.
• The cash flow statement helps identify potential business issues like liquidity problems, financial distress, and bankruptcy predictions.
• It connects income statements and balance sheets.
• It provides greater detail about liquidity, cash, and the company's financial position.

Historical Accounting Perspective

• Traditional accounting used balance sheets and income statements to assess a company's financial position.
• The development of the cash flow statement was required for a more comprehensive financial picture.
• Accounting standards now mandate its inclusion in annual reports.

Financial Statements Types

• Two types: Basic financial statements and supplementary financial statements.

Basic Financial Statements

• Consist of an Income Statement and a Balance Sheet.
• International Accounting Standard (IAS 1) details the content of financial statements.

Supplementary Financial Statements

• Additional statements prepared voluntarily or based on accounting recommendations.
• Often address specific situations, like financial statements adjusted for changes in the general price level.

Users of Financial Statements

• Current and prospective investors.
• Staff members.
• Lenders.
• Suppliers and other creditors.

Cash Flow Elements

• Cash flow is a broad concept, encompassing cash and cash equivalents.
• Cash equivalents are short-term, highly liquid investments like treasury bills, commercial paper, and marketable securities.
• Requirements for cash equivalents: Easy convertibility into cash and short-term maturity to avoid market rate fluctuations.
• Excluded elements from cash flows: Non-cash transactions and movements between cash and cash-like items.
• Cash flow statement is a yearly report based on the cash basis.

Cash Flow Activities

• Operating Activities: Cover items that influence income calculation.
• Investing Activities: Include cash inflows/outflows from changes in fixed assets.
• Financing Activities: Show cash inflows/outflows due to changes in long-term liabilities and equity.

The Classification of Cash Flows

• Operating Cash Flows: The impacts of activities related to the core operations of the company.
• Investing Cash Flows: The impacts of activities involving purchase and sale of long-term assets.
• Financing Cash Flows: The impacts of activities relating to company financing, such as issuing debt or equity.

Operating Activities Details

• Cash received from sales (accounts receivable).
• Cash paid to suppliers for purchases.
• Cash received from dividends from investments.
• Cash paid to employees for services.
• Cash received from interest on loans to others.
• Cash paid for expenses, taxes, etc.

Investing Activities Details

• Cash received from selling fixed assets.
• Cash paid for purchasing fixed assets.
• Cash received from selling shares or bonds.
• Cash paid for lending to others.
• Cash received from collection of loans.
• Cash paid for purchasing shares or bonds from other entities.
• Cash given as loans.

Financing Activities Details

• Cash received from issuing shares to increase capital.
• Cash paid to repay bonds, loans, and other credit facilities.
• Cash received from issuing long-term bonds.
• Cash paid to distribute dividends.
• Cash received through bank credit facilities.
• Cash paid for repayment of lease obligations.

Preparing Cash Flow Statements

• Three primary sources: Comparative balance sheets (showing changes between two periods, assets, liabilities, and equity.), Income Statement (current year, shows net income change). Additional information (specific transactions).
• Three steps: Determine the change in cash (balance sheets' comparison), calculate net cash flows from operating activities (analysing the income statement, converting accrual basis to cash basis, comparing balance sheet), determine net cash flows from investing and financing activities.

Comparison with Balance Sheet Changes

• Balance sheets describe assets, liabilities, and equity. Cash flow statements track money movement, categorized by activities.
• Balance sheets use the accrual method (revenue and expenses recorded when incurred), while cash flow statements use the cash method (transactions recorded when cash changes hands).

Cash Flow Measurement Criteria

• Cash flow includes cash and items easily converted to cash, with short-maturity periods to avoid market risk.

Key Financial Ratios

• Liquidity ratios (assessing the company's ability to pay short-term obligations).
• Profitability ratios (assessing the quality of company earnings).
• Financing ratios (evaluating the company's funding policies).
• Solvency ratio (evaluating the firm's ability to meet its long-term debt obligations).

يتناول هذا الاختبار الفصل السادس حول بيانات تدفق النقد من عام 2014 بجامعة جدة. يقدم فهمًا عميقًا لدور البيانات المالية في ريادة الأعمال وكيف تؤثر على اتخاذ القرارات. يعد تدفق النقد جزءًا أساسيًا من المعلومات المالية ويعكس تأثير الأنشطة المالية على الأعمال.