Associate Finance Executive Question:
Can yo walk me through a cash flow statement?
Answer:
Start with net income, go line by line through major adjustments (depreciation, changes in working capital and deferred taxes) to arrive at cash flows from operating activities.
☛ Mention capital expenditures, asset sales, purchase of intangible assets, and purchase/sale of investment securities to arrive at cash flow from investing activities.
☛ Mention repurchase/issuance of debt and equity and paying out dividends to arrive at cash flow from financing activities.
☛ Adding cash flows from operations, cash flows from investments, and cash flows from financing gets you to total change of cash.
☛ Beginning-of-period cash balance plus change in cash allows you to arrive at end-of-period cash balance.
☛ Mention capital expenditures, asset sales, purchase of intangible assets, and purchase/sale of investment securities to arrive at cash flow from investing activities.
☛ Mention repurchase/issuance of debt and equity and paying out dividends to arrive at cash flow from financing activities.
☛ Adding cash flows from operations, cash flows from investments, and cash flows from financing gets you to total change of cash.
☛ Beginning-of-period cash balance plus change in cash allows you to arrive at end-of-period cash balance.