Cash Flow Statement Part 1 In the case provided by the student it is possible to use the balance sheet to create a cash flow statement using the indirect method. The figures can be taken directly for the relevant month, or calculated by using the figure from the previous, month. For example, we need to known the depreciation, we are given the accumulated depreciation for Jan and Feb, therefore, and February's depreciation is the different between the two figures. Likewise with the investment, this can be assessed by looking at the increase in the capital assets between the two months, with the increase being an investment. It should be noted that the change in liabilities is not only accounts payable, but all current liabilities.
Feb Net Income Operating actives and cash flows provided or used Depreciation Adjustments to net income1 Decrease (increase) in accounts receivable Increase (decrease) in liabilities Decrease (increase) in inventories Increase (decrease) in other operating activities Net cash flow from operating activities Investing activities, cash flows provided by or used within Capital expenditures Investments Other cash flows from investing activities Net cash flows from investing activities Dividends paid Sale (repurchase) of stock -14,000 -10,000 0 -14,000 -9,000 0 17,000 -4,000 -13,000 0 -9000 5,000
1
Included to give the student a full template for a cash flow statement.
Increase (decrease) in debt Other cash flows from financing activities Net cash flow from financing activities Net increase (decrease) in cash and cash equivalents
-12,000 0 -