cashflow-statement.pdf
Transcript
Fundamentals of Accountancy, Business & Management 2 How much was the cash spent for this month in this business? How was cash obtained by the business? What causes the increase or decrease of cash? Cash Flow Statement Learning Objectives...
Fundamentals of Accountancy, Business & Management 2 How much was the cash spent for this month in this business? How was cash obtained by the business? What causes the increase or decrease of cash? Cash Flow Statement Learning Objectives At the end of the session, learners are expected to: 1. Define the Cash Flow Statement (CFS); 2. Discuss the components and structure of Cash Flow Statement; 3. Analyze the effect of transactions on cash flow; 4. Prepare Cash Flow Statements using the direct method CASH FLOW STATEMENT Definition: A change statement that analyses changes in cash and cash equivalents during a period Usefulness: Provides information useful to assess the entity’s ability to generate cash and cash equivalents and to utilize those cash flows IMPORTANCE: ❑ Investors: if business can pay dividends ❑ Lenders: if business can pay interest and principal ❑ Management: ensure cash is available to pay operating expenses, liabilities, and maturing obligations evaluate cash flows to make plans for solvency and profitability forecast cash flows to assess future cash needs, financing, investing, dividend payments MAJOR CATEGORIES OF CASH ACTIVITIES OPERATING ACTIVITIES MAJOR CATEGORIES OF CASH ACTIVITIES MAJOR CATEGORIES OF CASH ACTIVITIES PREPARATION OF CASH FLOW STATEMENT Solution: Bible Verse for the Day: ASSESSMENT/HOMEWORK OPEN FORUM ⦁ QUESTIONS???? ⦁ REACTIONS!!!!! END
