2020-02-06

Cash flow statement -provide info beyond IS,based on accrual获利, rather than cash and accounting.
包括1.cash receipts现金收入 and cash payments
2.company's operating, investing and financial activities
3.accrual accounting events on cash flows
分析者要考虑：
1.regular operations 有足够cash 去维持business
2.enough cash to pay off debt
3.additional financing

4. unexpected obligations
   5.取得新机会
   23a. compare cash flow from operating,investing and financial activities, classify cash flow to three categories
   Cash flow statement come from 2 sources:
   1.income statement items
   2.changes in balance sheet accounts
   A firm's cash receipts and payments分类为
   CFO/CFI/ CFF
   CFO-operating activities-inflows and outflows of cash from transactions-- affect net income
   CFI-investing-acquisition or disposal of long-term assets and certain investments
   CFF-financing-affect capital structure
   Operating activities
   Inflows: cash/ interest/dividend/ sale proceeds from trading securities
   Outflows:cash/acquisition/interest paid/tax
   Investing activities
   Inflows:fixed assets/ sale proceeds from debt and equity investments/loans
   Outflows:fixed assets/ debt and equity/ loans
   Financial activities
   Inflows:principal of debt/ Proceeds from issuing stock
   Outflows:principal paid/payments to reacquire stock/ dividends paid to shareholders
   23b. Describe how non-cash investing and financing activities
   Noncash investing and financing activities 不汇报在cash flow statement--因为不产生cash
   --必须disclose在footnote or supplemental schedule
   23c. Contrast cash flow under IFRS and GAAP
   IFRS allow more flexibility in the classification of cash flows.
   Under IFRS,
   interest and dividends--operating or investing activities
   dividend to company and interest paid to debt --operating or financing activities
   income taxes paid--important difference
   Under GAAP,
   all taxes paid as operating activities
   Under IFRS,
   taxes-属于operating activities除非expense 与investing or financing transaction有关
   23d. Distinguish direct and indirect methods of presenting cash from operating activities and describe arguments in favor of each method
   两种方法，都符合GAAP和IFRS--investing and financing activities 一样的
   Most firm用间接法
   Direct Method--cash inflow from customers减去cash outflows for purchases,operating expense,interest and taxes.
   直接法 :是将经营活动中的现金流入和流出各项目直接列出，类似于按现金制列示企业的经营活动的收入和费用;
   间接法(Indirect method)则是将企业损益表中的净利润，调整成为经营活动的现金流入和流出。两种方法的投资活动与筹资活动的编制方法相同。
   net income 转化成operating cash flow by making adjustments for transactions--不是cash transactions
   其中adjustment包括depreciation and amortization, gains and losses,
   Arguments for each method
   直接法
   优点：operating cash receipts and payments
   provide more information than indirect method
   间接法
   only present net result of receipts and payments
   focus on the difference between net income and operating cash flow
   Disclosure requirments
   Under GAAP,
   reconciliation is not required under IFRS
   Under IFRS,
   interest and taxes must disclose separately in cash flow statement
   23e. Describe how the cash flow statement linked to IS and BS
   Operating cash flow+Investment cash flow+Financing cash flow=Change in cash balance+Beginning cash balance=Ending cash balance
   Beginning accounts receivable + Sales- Cash collections=End accounts receivable
   23f. Describe the steps in preparation of two methods
   cash paid for new asset=ending gross assets+gross cost of old assets sold-beginning gross assets
   23g. Convert cash flows from indirect to direct method
   Cash collections from customers:
   1.Net sales
   2.-/+ accounts receivable (indirect method)
5. +/- unearned revenue
   Cash payments to suppliers:
   1.COGS
   2.depreciation or amortization included in COGS, these noncash expenses must add back
   3.-/+ COGS in accounts payable
   4.+/- inventory
6. -write-off
   Major sources and uses of cash
   move through life cycle
   Operating cash flow
   23i. Calculate and interpret free cash flow to the firm
   Free cash flow to the firm
   FCFF=NI+NCC+INt(1-tax rate)-FCInv -WCInv
   FCFF=CFO+(Int(1-tax rate)-FCInv
   Free cash flow to Equity
   FCFE=CFO-FCInv+net borrowing
   Performance ratio
   cash flow-to-revenue=CFO/net revenue
   cash return-on-assets ratio=CFO/ average total assets
   cash return-on-equity ratio=CFO/average total equity
   cash-to-income ratio=CFO/ operating income
   Cash flow per share=CFO-preferred dividends/WACS
   Coverage ratios
   debt coverage=CFO/total debt
   interest coverage=CFO+interest paid+ taxes pad/ interest paid
   reinvestment=CFO/ cash paid for long-term
   debt payment=CFO/ cash long-term debt repayment
   dividend payment=CFO/ dividends paid
   investing and financing=CFO/cash outflow