Consolidated cash flow statement

Download Consolidated cash flow statement

Post on 08-May-2015



Economy & Finance

0 download

Embed Size (px)


Consolidated cash flow statement


<ul><li>1.Urooj Sheikh Umaima Siqqidui Farah Ahmed Sahrish Darjat </li></ul> <p>2. A companys ability to generate future net cash inflows from operations to pay debts, interest and dividend. A companys need for external financing. The reasons for differences between net income and net cash flow from operating activities. The effect of cash and non cash investing and financing transactions. 3. A statement of cash flows is an important document that investors keep a close eye on. The report draws its significance from the fact that it provides data about a firm's solvency --- that is, its ability to pay debts. To investors and financial-market players, it's important that corporate management shows that the company doesn't put all its eggs in one basket --- in other words, corporate business lines diversify their investments in various economic sectors. 4. These are the principal revenue producing activities such as sales and purchases of goods and services These are activities usually deal with current assets and current liabilities Income tax paid is the operating activity 5. These activities deal with sales and purchases of fixed assets and other long term investments Dividend and Interest received on investment are the investing activities because they are the return on investment 6. These activities deal with shareholders (owners) equity and long term liabilities Dividend and interest paid is the financing activity because they are costs of obtaining financial resources. 7. The main difference between the direct method and the indirect method involves the cash flows from operating activities, the first section of the statement of cash flows. (There is no difference in the cash flows reported in the investing and financing activities sections.) Under the direct method, the cash flows from operating activities will include the amounts for such as cash from customers and cash paid to suppliers. 8. Operating Activities: Current Assets Increase Cash outflow Current Assets Decrease Cash Inflow Current Liabilities Increase Cash Inflow Current Liabilities Decrease Cash Outflow 9. Investing Activities: Fixed Assets Increase Cash Outflow Fixed Assets Decrease Cash Inflow Financing Activities: Long term liabilities increase Cash Inflow Long Term liabilities decrease Cash Outflow Share Capital Increase Cash Inflow Share Capital Decrease Cash Outflow 10. Current assets and liabilities changes other than cash. We calculate : 1. Net Income 2. Non- Cash Items 3. Other Income Extra ordinary 4. Current Assets and Liabilities </p>


View more >