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Cash Flow Statement _a_

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									Cash Flow Statement (a)
Financial Accounting Foundation (65)
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Cash Flow Statement (a)
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First, the concept of cash flow statement
Cash flow statement reflects a certain period of corporate cash and cash equivalents
inflow and outflow of financial statements.
Cash flow statement reflects a period of time "cash" income and
expenditure total aggregate number of specific circumstances, as with the income
statement, it is the dynamic statements. Cash flow statement in the
"Cash" means cash and corporate stock can be used to pay the
deposit at any time, including the "Cash" account cash
accounting; "bank" accounts of enterprises accounting for the
payment of the deposit at any time; "other monetary funds"
account of the other ports deposit accounts, bank deposits, money orders, cashier
deposits, money in transit funding and other monetary funds, and cash equivalents.
Cash equivalents, is the holding period for the short (usually three months), highly
liquid, readily convertible to known amounts of cash, a small risk of changes in the
value of the investment. Cash equivalents, though not in cash, but its ability to pay
with cash, little difference could be regarded as cash, generally in the
"trading financial assets" account accounting. For example,
corporate-owned, may be in circulation in the securities market, short-term debt due
within three months of investment. The amount of equity investment is usually
realized uncertain, therefore it is not cash equivalents. (The following references to
"cash", unless the same time reference equivalents, or both,
including cash and cash equivalents.)
Cash flow reflects a certain accounting period of corporate cash and cash equivalents
of inflows and outflows. Business from the banks to withdraw cash, use cash to buy
Treasury bills and other short-term maturity of the conversion between the cash and
cash equivalents are not cash flow.
Second, the role of cash flow statement
Cash flow statement purpose is to provide users of accounting statements 企业 会计
some of the cash and cash equivalents Liuru information to statement users to
understand and evaluate companies ability to obtain cash, and according to predict
enterprise future cash flows.
Market economy, business and cash flow to a large extent affect the survival and
development of enterprises. Cash-rich companies may in time acquire the necessary
materials, business supplies, fixed assets, the timely payment of wages due to repay
debt, pay dividends and interest; the other hand, at worst affect the normal production
and business activities, while in threatening the survival of enterprises . An
"Company Law" provision, Gong Si can not repay debts due,
shall be the statutory procedures was declared bankrupt by the court provided in law,
organizational shareholders, the relevant agencies and related professionals establish a
liquidation group, the company liquidation . Corporate cash management has become
an important aspect of financial management by business managers, investors,
creditors and government regulatory concerns. The role of the cash flow statement,
can be summarized as the following four aspects.
(A) of the cash flow statement will help evaluate the enterprise's ability to
pay, solvency and liquidity.
Through the cash flow statement and balance sheet and income statement with the
cash and current liabilities compared to figure ratios; to net cash flow and outstanding
common shares compared the weighted average number of shares to calculate the
cash per share flow; the net operating cash flow compared with net income, calculate
the profit in cash rate, we can understand the cash could maturing debt, pay dividends
and make the necessary investment in fixed assets, to understand the efficiency and
effectiveness of business cash flow , etc., to help investors to make investment
decisions, creditors make credit decisions.
(B) of the cash flow statement can help to predict future cash flow business.
Evaluation of the past is to predict the future. Tong Guo corporate cash flow statement
reflects cash flow past a certain period, and other Economic Indicators, you can
understand the sources and uses of corporate cash is reasonable to understand the cash
flow generated from operating activities how much business the extent to which
reliance on external funding, enterprise can predict the future, according to the cash
flow to cash flow for the enterprises to plan, organize cash scheduling, reasonable use
of the cash economy and create conditions for investors and creditors to evaluate the
enterprise's future cash flows, make the necessary investment and credit
decisions information.
(C) cash flow analysis of corporate earnings helped the quality and the factors that
affect net cash flows.
Income statement shows the net profit target, reflecting a company's
operating results in a certain period, which is reflected the most important business
performance indicators. However, a profit-making enterprises may not have ample
cash to repay debt and pay for the goods meet the daily business activities such as
cash expenses, because the income statement is prepared in accordance with accrual
principles, it does not reflect the number of business activities cash, and do not reflect
the investment activities and financing activities, cash on corporate finance activities.
Through the cash flow statement, you can master the business activities, investment
activities and financing activities, cash flow, the cash flow generated from operating
activities, compared with net income, we can understand from the perspective of net
cash flow quality, and further determine what factors affect the cash flow, so as to
analyze and judge the company's financial outlook information.
(D) cash flow statement, to facilitate coordination with the international practice.
Currently, many countries require enterprises to produce cash flow, such as the United
States, Britain, Australia and Canada. Coordination with international practice,
China's enterprises also have a cash flow statement, the move will be to
carry out cross-border operations, foreign financing, strengthened to play an active
role in international economic cooperation.
Third, the basic structure of the cash flow statement
China's "Accounting Standards for Enterprises No. 31 - Cash
Flow Statement," provides that the cash flow statement is divided into
tables of Chinese enterprises first, are tables and supplementary information of three
parts. The first name of the table, including statements, organizational units, the
preparation period, the amount of units and so on.
Is the main table is the cash flow statement and core. Cash flow statement is cash flow
table will be divided into three areas:
(A) cash flow from operating activities.
Business activities, is the corporate investment activities and financing activities
outside of all transactions and issues. In addition to investment that is attributable to
the activities and financing transactions and other matters can all belong to business
activities. Obtained from the operating activities occurred in the cash income and cash
expenditures constitute the cash flow from operating activities. As the characteristics
of different industries, different types of businesses identified the scope of business
activities vary. Cash flows from operating activities projects generally include: selling
goods or rendering of services received in cash, received the tax return, received from
other operating activities cash. Cash outflow from operating activities mainly include:
purchase of goods, receiving a cash payment of staff salaries, fees and related income
tax to pay taxes, pay for advertising costs, paid for other operating activities cash.
(B) Cash flow from investing activities.
Investment activities, is the corporate long-term assets (or assets) of the purchase and
construction are not included in cash equivalents, investments and disposal within the
scope of activities. Here the long-term assets consist primarily of fixed assets,
construction in progress, intangible assets and other long-term assets. To note the
investment activity and investment are two different concepts, investment is divided
into short-term investment and long-term investment, acquisition of fixed assets is the
investment activity, but an investment in Bushi; 购买 bonds maturing within three
months short-Shu Yu investment, but it is not investment. Obtained by the
investments of cash income or cash payments in place constitute the cash flow from
investing activities.
Cash flows from investing activities items generally include: return on investment of
cash received and achieved investment income received in cash, fixed assets,
intangible assets and other long-term assets, the cash received, received from other
investing activities the cash. Cash outflow from investing activities mainly include:
purchase of fixed assets, intangible assets and other long-term assets to pay cash,
investments, cash payments, payments to other investing activities cash.
(C) Cash flow from financing activities.
Financing activities, is the leading venture capital and debt size and composition
changes in activities. Capital mentioned here, including the paid-up capital (equity),
including capital premium (equity premium); here said the external debt is debt,
including loans to banks to issue bonds. However, accounts payable, notes payable
and other business activities are not part of fund-raising activities, does not include
the debt mentioned in this list. Financing obtained by the cash income and cash
occurred in the composition of spending the cash flow from financing activities.
Cash flows from financing activities generally include the project: from investments
in cash, the cash received from borrowings, other financing activities received the
cash. Cash outflow from financing activities mainly include: paid cash to repay debt,
distribution of profits, dividends or interest payments paid in cash, paid for other
financing activities cash.
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