How to read annual cash flow statement

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					How to read annual cash flow statement
Cash Flow Statement
Cash flow statement (statement of cash flows)
?Definition】 【cash flow statement
Cash flow statement of the financial statements of one of three basic reports, also
known as accounts of changes in conditions, expressed in a fixed period (usually
monthly or quarterly), the one institution in cash (including cash equivalents) increase
or decrease in variation. The emergence of the cash flow statement, mainly to reflect
the items in the balance sheet impact on cash flow, and according to its use Huafen as
operating, investing and financing activities in three categories. Cash flow statement
can be used to analyze an organization in the short term do not have enough cash to
meet their expenses.

Cash flow statement is a display in the specified period (usually one month, quarter.
Mainly the annual reports of the year) in cash inflows and outflows of financial
reports. This report shows the balance sheet (Balance Sheet) and the profit and loss
account (Income Statement / Profit and Loss Account) how they affect cash and cash
equivalents, and according to the company's operating, investing and
financing perspective analysis. As an analytical tool, the primary role of the cash flow
statement is to determine the short-term viability of the company, particularly the
ability to pay bills.

Business over the past emphasized the balance sheet and income statement are two
tables, with the expansion of business and the complexity, growing demand for
financial information growth, more business because of the interruption of many
causes in the capital flow problems Gradually, the company reported cash flow of
capital movements may also be of importance in many business operators as it will be
necessary in the financial statements.

Cash flow statement reflects a certain period in the cash inflows and outflows
dynamic situation reports. The content and composition of the balance sheet and
income statement line. Through the cash flow statement can be summed to reflect
business activities, investment activities and financing activities on the business
impact of inflow and outflow of cash for the evaluation of corporate profits, financial
position and financial management than the traditional income statement provide a
better basis.

Cash flow statement is the original changes in financial position or cash flow
statement of the status of the alternatives. It describes in detail the
company's operating, investing and financing activities generated cash flow.
This form from the Financial Accounting Standards Board be ratified in 1987, which
is sometimes called the table No. FASB95.

Cash flow provides us with a company is healthy evidence. If a company generated
cash flow from operating activities could not pay dividends and maintaining the
productive capacity of capital, so that it use statistics Jiekuan of Fangshimanzu
Zhexiexuyao, Name That Ji Women 1 Jing Gao, the company can not be sustained in
the long run, under normal circumstances expenditures. Operating cash flow
generated by showing the cash flow shortage and had to borrow to pay the dividend
can not be permanently supported, 从而 revealed the company's inherent
in the Fazhan 问题.

The first order to standardize the preparation and presentation of cash flow statement,
under "Corporate Accounting Standard

Then - Basic Standard ", to develop the guidelines.

The second cash flow statement, which reflects business in a certain accounting
period Cash and cash

Equivalent logistics into and out of reports.

Cash means cash on hand and ready for payment of deposits.

Cash equivalents, is the holding company of short duration and highly liquid, easily
convertible into

Known amounts of cash and little risk of changes in value of investment.

The guidelines refer to cash, cash equivalents unless accompanied by reference to
both cash and are

Gold equivalent.

Article consolidated cash flow statement preparation and presentation, for
"Enterprise Accounting Standards

33 - Consolidated Financial Statements. "

Chapter II Basic Requirements

Article cash flow statement should be for operating activities, investing activities and
financing activities,

Reported cash flow.

Article in accordance with cash flow should be separately the total amount of cash
inflows and cash outflows are reported.

However, the following items in accordance with the net amounts:

(A) on behalf of the clients received or paid in cash.

(B) of the turnover is quick, large amounts of short-term project cash inflows and cash

(C) of the financial enterprises of the project, including short-term loans granted and
repayment of the loan

Kim, absorption and demand deposits paid Due from banks with deposits and access
to its

His financial funds borrowed, as well as purchase and sale of such securities.

Article VI of natural disaster losses, insurance claims and other special items, should
be in accordance with its nature,

Were integrated into the operating activities, investing activities and financing
activities, cash flow category separately


Article VII of foreign currency cash flows and the foreign subsidiary's cash
flow, should be used now

Cash flow occurred on the spot exchange rate or in accordance with the systematic
and rational method to determine, and with cash flow

Place spot exchange rate at the approximate exchange rate. The impact of exchange
rate changes on cash amount should be used as

Reconciling items are reported separately in the cash flow statement.

Chapter III Cash flows from operating activities

Article VIII enterprises should adopt the direct method to present cash flows from
operating activities.

Business activities, is the corporate investment activities and financing activities of all
transactions and other matters

Direct method refers to the cash receipts and cash payments through the main
categories of business activities listed

Cash flow.

Article cash flow from operating activities related to information, can be one of the
following ways



(A) the accounting records of enterprises.

(B) The following items in the income statement operating income, operating costs
and other

Items adjustments:

1. Current inventories and operating receivables and payables of the changes;

2. Fixed assets depreciation, amortization of intangible assets, provision for asset
impairment and other non-

Cash items;

3. Are investing activities or financing activities, cash flows and other non-cash items.

Article cash flows from operating activities shall be presented separately to reflect at
least the following

Information items:

(A) Sales of goods, rendering of services received in cash;

(B) Tax refunds received;

(C) Other operating activities before cash;

(D) to purchase goods, receive services paid for in cash;
(E) paid to and for employees paid in cash;

(F) the payment of the taxes;

(G) Other operating activities to pay cash.

Article financial enterprises according to industry characteristics and cash flow
situation, together

Management cash flow from operating activities to determine the type of project.

Cash flows from investing activities Chapter

Article XII investment activities, is the purchase and construction of corporate
long-term assets not included in the cash


Equivalent range of investment and disposal activities.

Article XIII of the cash flows from investing activities shall be presented separately to
reflect at least the next

Out of information items:

(A) return on investment of cash received;

(B) Cash received from returns on investments;

(C) disposal of fixed assets, intangible assets and other long term assets Net cash;

(D) Disposal of subsidiaries and other business units of the net cash received;

(E) received other cash and investment activities;

(F) to acquire fixed assets, intangible assets and other long-term assets to pay cash;

(7) Cash paid for investments;

(Viii) the acquisition of subsidiaries and other business entities net of cash paid;

(Ix) the payment of additional cash and investment activities.

Chapter financing cash flows
Article XIV of financing, is the leading venture capital and debt scale and structure

Change activities.

Article XV of the cash flows from financing activities shall be presented separately to
reflect at least the next

Out of information items:

(A) of the absorption of investment received in cash;

(B) Cash received from borrowings;

(C) receipt of other financing activities related to cash;


(D) cash repayments of amounts borrowed;

(E) distribution of dividends, profits or payment of cash interest payments;

(F) the payment of other financing activities related to cash.

Chapter VI Disclosure

16th enterprise shall be disclosed in the notes is net profit from operating activities

Cash flow information. Should be separately disclosed on the net profit at least to
adjust the following items:

(A) asset impairment

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