Documente Academic
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Debby Bloom-Hill
CMA, CFM
CHAPTER 13
Slide 13-2
Need for a Statement of Cash
Flows
Stakeholders want to know how a
company generates and spends cash
Can the company
Generate enough cash to pay its wages
and bills, including debt payments
Generate cash in order to earn a
reasonable return and pay dividends
Generate enough cash to avoid
bankruptcy
Slide 13-6 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Examples of Operating Activities
Slide 13-7 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Types of Business Activities
Investing activities
Cash flows related to buying and selling
of long-term assets
Examples include collections from long
term loans, collections from the sale of
equipment no longer in use, payments to
buy securities of other companies,
buying a building and buying a business
Slide 13-8 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Examples of Investing
Activities
Financing activities
Cash inflows related to issuing stock
and issuing long-term debt
Cash outflows related to
repurchasing stock, paying off loans
and making dividend payments
Slide 13-10 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Examples of Financing
Activities
Answer: d
Payments to suppliers for raw materials
Slide 13-12 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Which of the following would be a cash
outflow from investing activities?
a. Payments to suppliers
b. Payments to employees
c. Purchase of land
d. Payment of dividends
Answer: c
Purchase of land
Slide 13-13 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Which of the following would be a cash
outflow from financing activities?
a. Payment of dividends
b. Payments to taxing authorities
c. Purchase of land
d. Cash sales
Answer: a
Payment of dividends
Slide 13-14 Learning objective 2: Identify the three types of business activities
presented in a statement of cash flows
Statement of Cash Flows General
Format
Answer: c
Net cash provided by operating activities
Slide 13-39