Statement of Cash Flows: Operating, Investing, and Financing Activities‘Throughout rscarded history people used ting of sh lows isa cuca! determinant of ‘many us ems 35 money. bu peaps the francil wles ‘eesti the spac sons used bythe Ypese The Yapese inhabit the ieand of Yop ia Federated States of Miconesa They used stones fom a his chapter focuses onthe sateen of cash lows, andi as fou main gal: stat lan for mane. The lager ihe stone the 1, To exe the defntion of cash peater ts val, Some ofthe most valuable ‘weighed several os. his certainly inte thet but we understand twas very hard on parking nets! Money & important vey saci and account ‘ng pays spa atertion cash, Cash is 50 Toexanine the operating, investing, and finaneng actives used to structure he statenant of cash flows ‘To show the reation between cash flows from opeatons and net income Important a resource that a specal accounting 4. To rvide two ways of constructing and pe repats devoted exe) to cass he satament ser cashflow statements ‘of cash Fos, As sean in Chapter th statement ‘of esh fo stands with the Ico statement and the balance sheet as one ofthe major outa of GAAP accounting. nfo, tse thee state mens are reine as shown in Figure 4.10 the language of acouting, the dee statements atte, n ton to going tough the dts of cash fou sates, we wl asa se the artic dation of he tre primary accouring statement ‘This chapters goed as follows In a ele tronic age cs cming in more and mare farms, 0 we Beg by dscusing he dfiring char actaritesof ash. We present an example of @ cash fow statement, ard explore is main sectors ‘operations investment, and hancing, We con struct a stort example that shows hy cash fw Infooatin wal to have nation othe nat Income fur The next sation explains the dec. “Ces sal the key to the ancl value of ny and indie methods of presenting cash flo agro business. aople on foro bus statement, We use 2 wetsheet for comping the esses io enoy the financial eum they gener- cash fomstaterten sng the indie method We ate financial retusa generate by actual show thelogic ofthe worksheet and the indirect prospective dstrbtions of cath to ane Fnen- method ina way that reveals the inner workings ial analss and investment advises are con- ofthe accual meted of accouning, We condude Cerned about an orgarizaton’s ably to generate by presen some financial anal techniques ash lows not just profits As we wil see, the that use ne ifermation in cash lw statements onoacrive: lear ts don aah ryan sae Basic Definitions, Theories, and Examples AKhough tay be obsows in most dy day stuntions dining just wha i and i ‘ot cash can gc Definition of Cash ‘Cashis ea transGerable value. Is heat common way organizations acquire the fonds and seve they ue to cary thr aetiee Ie sea commen Way They cept parent om estomescentemdreaine entemineatne Seneomenncey © Guan Bie | E eee oa [ ' er ee een ee ata Sonido tan ah oe Sst "Cash comer in may fons. Cnrreny one form of eas Caneaces ar the cans sn pies pop tht governments re for ue in making economic exchanges Malt ‘Stoned onanitions usally bol he errencie of ever governments in ode oe {hte eal in tanections ia many geographic rexons. Coteny is the most familar fut fash, “Amounts on depot in hacking acounts ate alo cash For example, Yale Uni- ‘versity une checking acount to pay facty and staal sues eck which ‘rployes ether cash le. change nt curren) or deposit nto thet own ban 3 ‘hu. Many employes peters shortcut neiod of recevng payment thei heck fre diced deposed in ks wn secant, Ye simply itt the bank to reduce its account and increase the employees accouis bythe amouats earned. The amount Ie bythe Buk that is raat Ye for the payment of ts employees 2nd > lets spare of Yale's ath Tis tenable io wonder where to dr the ie about what is apd isnot eas For ample some oganznttons ct he feque-fisr es earned by the employes ‘Fhe mies ane used to pucate irae rent ear and segue ow! scored ‘ons. Ave fequet er miles cash?68 + tars unontewrats oF accovurine oarscrivs 1 Ue eda conan Anough they share some of he ttt of easy fequene ler alls ae not con. see cash The primary eso isha hae erected tothe wsusison of gods fd series fom purl supplies Only supplier thot are fled with «specie Frequent program wil cept she fom tha progra. conta US. dlrs ate almost unherey seeped ‘Wie ing up these of regent Aims a form of i far wo reasons. Fst, Increased ability to lep tack of and procs age amount of afin say lead get many ergintations to sue their ow very ited forme of currency. Asmbe fompanies ow ise eit cards hat, wen ured, generate lr tha ca be used by ‘he credit cad user orale the purchase pro's aw ear rom hat comp. We es this wend to conti "Te second eon we vie te ist & to highlight he importance of considering stron ia atening whether we count someting sch For sam bane nes ties regi as part a oan apremant hat the Borer Hes «minus amount ‘on dest. This ameouniscalled a eomperting bane. Compensting bla ae te Strict ip thi se and ae not consider pat ofan oraniatons cash, ‘Another etampleisrrrted cuteny A tne, varios goreramentsenforce por Iain guia taking ther ccenie out of thelr county whic its the ay ofthe organization to we that currency i tacos I the limitations te sete enough, we would ot think of that eel a cash. Cash i edly transterabe val {Currencies that cansot be talen out of specie geographic region ae not ready ‘canter Cash Flows However we define cash ash lw isto achange in ct change in cash can be an increase (lows othe en) or decree oitlows fom the ey). The eah few ‘statement dsr he changes in an en’ cash overs peri of time by groping the increases and decreases inte ast of catpees hat daseie the Stites that cased them ecl the cath fw statment of the Vion Pass Hotel and Cain that was pr sented in Chapter 1. es reproduced in Ei 1, Note hats sain category oe ‘sh ow fom operating ais, eth Mo fom investing activities and ah ow from Financing atte. Tis sialon of en Hows rele pragmatic ew ofthe ra Jor economie etvite of ay organization Ie petaps bes eplined by tence To the income statement and he Balance shee. Facing ait are those tht reat 10 ‘he auistion and diposton of fans by ising and resing Yong tern debt sno ules, Tas ates pre the each ried for ntsting which the acquis (God dspeston) of longs ase: Opentions are reflected in the income semen (Operating sctivtesinvave using cert sss and current lbs inthe ongoing Asytordsy operation ofthe orgabiation accomplishes ts parposer. Roagh spe ing the, cash ows om operons apes cashed rough oe sued Wy tbe day-to-day operating acti ofthe frm. cath owe fr investing epesent cath fons sed to make log-tomm invstnents in fe ets eg over the lang, Cash los From financing represent cash asd am ein ehose abject ito provide ude fr the longer ez, We noe discuss ech ef these vee seevone of the ech Ho tte ‘meat ino det von though cath ows fom operations ate offen the mot important, we Sst siscus cash foes rom investing and nascing sev Beatie eh osama trations are defined aso esidua. They ae what eerin alr eah os fom lavest- Ingand Gesncing mein nd financing ober acts than oper ions [eb esier to spll out etal wht they menn and et operations” bes ctcal for verything ese This dtineton reflects We practical rgurement chit thane cave "ions must cover ll ase. As we wile, this technaque of comping things at snme \welldefined categories and one "other" cangoy used qlteaen in acounting conar wR Sng REE 2 m me cnt as ERE OTT sbi 4 Un a as cpzacrve: ero acm ca fos feminine a avenge ste tem 3 sug td digsing of es Dat feneite a ancl ta (ora lng pend of ie ‘ion Plaza tel en inn, lean subi Canada Ssement ef Cah ws Ferthe Yer Ended December 33 2001 (Galas ia thomas) ‘CASI FLOW FROM OPERATING ACTIVITIES (Cah renal Hom atoms ssa7st ‘Gah pid topes ad emploeet gist) Tere ed 2 Tete pe e300) NET CASH PROVIDED BY (USED IN) ‘OPERATING ACTIVITES Sos ‘CASH BLOM FROM INVESTING ACTIVITIES ‘roca om ale of propery ad equaent sa Fuscin of propery andegupment inc} NETCASTUSEDININVESENG ACTIVITIES SULI8)) ‘CASH FLOWS FROM FINANCING ACTIVITIES ‘nea perme on sore tem ents 5 css) Proved em ong em Jt 200 Prin payments om longer debt few) Prin pamens on pia ees (819) NEPCASH PROVIDED EY SINANCING ACTIVINIES $202 .NETINCREASE (DECREASE IN ‘CASH AND CASI EQUIVALENTS 2 {CASH AND CASH EQUIVALENTS beng of the yor_3.33 (Cast AND CASH EQUIVALENTS atenofteyear S352 Investing Activities ‘Cention engage in many bps ofivestng ett For example in 1994 Quaker {Oak spent 17 bilon to sugue all ofthe common stock of Snapple, A of Tne 30, 1999, zrowot had sunt abou S22 Lon in ste. The Boeing Corporation pad S20 lion in loon os customers in 1996. Tavetng actives ae aed at nein set that wl generate Hani retarn cover Tong food of tne Th deft St 7 casual otion of investing ates. ‘We samy thin ofan investment a» enh jayne fran tm at wl produce a ividend over the long hae In the ofeiat languige ofthe FASB: vesting acivitos ince making and collasing oa and acing ed di ovng 9 eb or eiyintaanar ad groper, plat ait pment and ter prev ty ht es bl oor oe in th predation of nds scl by te ene (ther than wat hae pat of the eneprise Sweat “The invesing section of Union Peas 201 hw tatement (Exhibit 4.1) si pe Union Pets purchase and sl of property and eqipmentar thon} tems Union aster 343 thousand in ch from the ale of propery and equipment and it pent L173 thousnd to puchae property and equipment. The ttl isan outow of Gahof S131 thousand fr ivesting ates.n- room operting eh flo Some of hese ‘pda to manag ingles Th eorprtion one ans bl ‘oc cea fire oe long pei of ine Financing Activities ‘Orpaniaons rpc must engage satis hates nds usd over the ong term, FHnancngaivites ele inning acti In the "ald day aeqring Enancing snl meat incrng fon sive atoning lagen deo ning oman ogy. The inensing development 2nd sopisteaton ndvepying ndsto be, offitncl mci owever ed othe derelopman fs ret arity of Geacl nt Siodowtslingpainl of mente Many of thee nani intrarmentae not sly bt egy Rel of te te ‘pci financial nsrarent sehen, Sci aces ae aed at asic or exmpe [BM rased 757 bilan bye ssdanceof new debe in 1986 nd in tat sams ea ed $1.9 bien to py of debt Miso asd $804 milion by isang corn ‘on tock in 1986 ad ee $1.28 billon of exh to epurcte ws owe commen sock. "Thee acvies te sme 3 sciring a paying Fok ands hat wil be used and repaid over long peti of time. Thr defini Bs our casi] nti of Bhancing ac tives. For esarple, we finance the purchase o ca o a house by geting loan. The Toon provides the adh wed or the urease and we repay the lean over 20 extended pti of ne ln the ofl langoage of the EASE: Financing cvs incu bung reece fm owner an providing thom he retro anda return of hess ing reureha by donor “pula mat be wa Jr longterm purpose bron money and eae ‘amowats rons or ere etingreolgation aad cbening el paying forotorresurse tse ro eis long ter cers ‘Union Pian insnsng acts included paying dowa sindbis om short ‘erm contact (ouHln of 5158 thousand), suing foog-em de indo of 82,000 ‘hows, repspng long-term debt (tow of $68) thousand, and paying cbiatons ‘under capil ese (outow of $919 thousand). The et of these nancng activites i G01 generated a toil f S282 thousand Sreingaciviess= Operating Activities iting nor fining Alcs owe tha ac ot inverting or financing ae las arising from operating vette ctvites Operating seis ine sling wo easomers,compenssang debt holdersons rere RE {or the we oftheir money suing and sling iventoy and esrng and sing abo. or enmple Union Pla reuted $54,761 thounnd rm cuore snd $3 thousand in Interest 201 pid $51 314 thousand wo sop and employer nd 2.38 thorns In ners. The net of thes operating atts seated 2 wl of 1,66 town ‘Operating aetivies re tthe cot ofthe organization's purpose. Public eorpaaons reformed to genre financial er owes trough opesting cnn Not pro rganiations such 3 he Red Cros an vate iver et pl se ‘es through thr operations In this sense undertanding tech en fm operations 1a lay tundestanding the nancial performance of an organiation, The FAS see Operating sites inc al noone ad ther event tht ate wor defi tiie or racing ates Oper actin poner ee pro cing aad dtverng ods ad pong ers Cask flow ro operating ne thie oe gone ee ft of rast an ater eet tent ato the determination f ne iso. Cash Bow satements use thse categories of activities deere eas Ao, bat cash low saemeats do nat stand alone. They we intimately eld to balance seat nd income stements, We nex begin to dics the cs between operating inves nd financing sctvies and balance sheets by e=plving the velaton between types of {th dows and typer of blanc sheet account Then me explore the relation betwee {Gah Dow om operstions and income sateen ‘Types of Cash Flows and Types of Balance Sheet Accounts ‘The tection of the cath flow stement and vious ope of blue sheet aecounts ouphly correspon Cah fons fom inven sally, bt ot exci, cle to {he noncurent ase accounts, Cash flows om fazecingare usa, bt oc excuse, ‘dated to the noncaran labiy and ext seman Cath fw om operons ae ‘sun ue not exclusively, elated tothe crtentaet and curently serent {tind arnings, and te income statement acount, These eaten wil bela er we introduce te worlahest any acount une to Pepa the semen of ca owe ‘Some ex fw may relate t more than on ype of ctv For example, buying ‘oma supple om ert ahualy considered be the rev apersting acti, tren thoagh tf for of borrowing nay A foaled lan rom spp mht be considered a Hnancing uct In such cass he casieaion a he ean em Imo investing naneing, oF opecting must be dene according to the scouts rent The ging piel isto cls the ten according tthe predominant souree sf eh fos ‘Dividends and intrest ate cash ve items that undeacre the importance af knowing how accountants class cash flaws lou both ae css of wing someone sles money the sateen of cath flows rss Dem diferent, Dividends ne ened tsa financing csh dow Iteret payments ar csfed a an operating cash flow ven ‘hough both ae payment forthe ue of invested capital Te tester f these es Inthe statement of ash ows rested tothe rentmet for income sateen par ‘Poses. Reel tht intr expene considered ven termining net ncomm whereas ‘vidends are not. This diferenaton brings int play the FASB statment datas ows rom operating atts are generally the cash ects of tansactions end other ‘fens hn enter nt the determina fn ome ‘nelast sue deserves mention here. Sometime an osaizaton wil ngage in i= ‘esting, anc, o aeriting actives tat donot ive cash Foreplay ot [sttion may trade common ck for land, Tes nish tabsctns ste not att {tthe can fos of a organization but they met be reporte. For example the Rae ‘Company lange developer of commercial el erste bad several none tanections in 983, 1954 and 195, In 1994 Rous sud $8 mon in eanverble preferred snc to saisy « morgage debt. Although noncash vansacons are spel of much les72 + mers runeawcataes oF accovntins once: sun a te Sonatas tno aati eal oy Corapny = Sewing J a pt Va abit 2 ‘ly Sac St of sana 1.2008 importance than cash doves ts mportin to consider thr in sseting the ial performance and constion of a organisation, Somsines good ressn trate nom ish tnsacions, most ole rested to ater A comprehen final alysis wll Incorporate these nopash tens. Cash Flow from Operations versus Net Income ‘The cera income statement disused it Chapter eased on the mason of revenae and expense Revenue and expense attempt to mics economic ptformsnce—how ‘els company i doing at creating valueover 3 prod. Wentodeed incase in Go spt terms woot reference tthe saves of the cai but the relation between the kinds of activites portayed inthe uh Bow atement and income spor. parte income crus fom opestng stv, not fom investing and faning $ctvils Therefore, x natral nd el o compare income with ea Now fay pertins ‘Actual it i move thn weil understand the relation between ch ow fon ‘opertions and net incomes ital Wevl ee in Prt 3 that mame estimates and stcounting choies go int the calulon of net income, Crmpuring nt ncone to each {ow from operations provides vital infrnston about how "al the net income at alive ‘Soltis important to understand the ation between nt income a cash Bw rom opezatons. We begin the prouss of ging this ndereanding by working though 3 npc example hat shows now anitligent reader finan statement ea ie both ‘cru and cashflow information o bee sss whats bappening ns compan. Bea {Crsberg an FASB exper on ach How, oxce si Asking which one x bee cash Sow ‘or earsngs like asking which you sould cutout, your heart o your lunes" Hope Fy you wil ee oapprecnte the importance of tht oberon An Example: Total Toy Company “The Toa Toy Cormpany was incorpratalon Janay 1, 2004 and suthoried the ese 10 shares of no par common sok prom sald hese 10 shares wo ivestor for ‘7800 Ia balance sew immediatly fer sling it share shown in Exh 42. The ‘company puchiss das at wholesale for 1.50 nd sel them to customesin i eal ‘ute fr 826 eich Le us astume, for exe of Museation, thatthe $19.40 cost pe dol ‘Tol Toys only cot. “The company epcates under the follwing polices I ahtys msintsins an ime ‘oxy af ls equal 30 more han the mur of doll so sing the previous 90 dys [czas Total Toy was ne ommpany, he anufaeae ofthe del aged Total Toy "sans Shest cat 23m Teal tiie soo “Dud ae sso our Sa Rene exsiogs ° Common sack 2800Cannan 6 SiATeMeNT oF cA FLOM OPCe4tIG, nvEstING, AND FanMCIG sex + 7B senile 43 ‘Wot y laweSets f Suny 5.208 ehiie 6b Wty anny Paces ‘Saha me) tops cash upon esp ofthe ol, Teal oy cstomers pid the company athe end ‘oft month afer they bought the dol ‘On Tonsary 31 fer the fst month of opentions: he cempany’s balance shost appeared vin Exhibit 43, The preient ves pled hat Total Toy made 2 profit of ‘Ses0 on January sale of 100 dole He predced Dat sles would increase atte of So dalle per moni forthe eat sx moot is pdilons came te tough the end ‘taprisand the company etaced ol oft plies or immediate payment to sup ples of insentony ana eaayed elections of rcevables rom customer The umber ‘fda purchased for inventory and the mamber of unt sold daring each month ae Shown in Exit ‘a Ty Compasy suoury 3,206 assess asians con ‘alles so ‘cout sible Tnvesioy vite ened earings 0 Toads S815) Common stack 2300, Tl abe seeqty $5480 cwowware Buu MARGE PL egoning etary ° 10 mt ‘nel in month 100 160 io Unie parca nrmoatk 250 20 x Endagivestry 150 0 SM Ate ead ofp the president ofthe company was dscusing with ends the prof infor the et four mont when the contol tol im tht the company sake tres zt en the compu nade o boro finden order a cote ope it My ‘This announsmen rns aque «sock the pride He could ot word bow [econ be mab pot yt rin ot of ak He dere ori the companys ec ‘omic a pay puri tenon othe carnation betwee is profs ed isash Bows, “otal Toy males a profit of $650 on each dll sol: 2600 sls pice “The company sod 70 dels ingthe et furore 10 sary) 150(Febusey) = 200 (Mah) + 250 (Ap). Te present terre igure he compar’ ros: $630 oi per dl S50 emberHe ws ee that thisfge fa profit ws cre becase the eens fm the sls were sw Naber dls ‘The expenses fam the ler yea Nawnheraf dolls xsi95) ——_Coseperdall SGa81 © Tlesenes So spin the proton thx 70 dll was 4,550 136) penser Easo re After redoing dese clelatons the president realized that they did nota al rer ‘cis Mos In partly, the 180 cose dol hd ob paid mediaty upon the ‘ompany’s poche ofthe dll Each dle ain inventory for 30 day before beng ‘old Even alter twas sol eas bother mth before the company callerted ath fot ltseusomers Aon gap separated Tal To's payment of S130 fem cllece ‘on of $26 foreach dol, The preset decided he needed to nae ch ws sepa aly hom prot ‘Th company al for 100 dl am arto the end of pik 250 Janay) + 200 (brary) +250 (Mane) #300 (Apel. Teer the compy pa spo 919,50, 1000 Narberth an pa fr Sis50) Tl espeditare “Tot Toy's expen: of $19,500 from January 1 to Apel 30 were more dan ts 6x ponies of S13850 over the same period ‘Antberproblem was tat he comgny ony collec on 90 dole (snuary) + 10 (February) ~ 150 (Marc) + 200 (Agri. Therefore, the company only tected 51,700 from guste 650 Number ds caomet bough an pa for halrecpts Total Toy’ ars of $1,700 from Jnuaey 1 to April 30 were les than ity revenue of| 18200 over he same pied, “Toul Ty's cash dow fom ansary 1 te Api Seite esp ise expenditures Sinz Resets (d9s0) sponds, S500) Cah owe “The president eed that this caletion confiemed what the costo old hi he ‘company wat out of ash. The president fee that he compen sted with 7,800 a ‘dyad «negative cn ow of $7.00 fom anacy 1 to Api 0 ould ke te an Felane esto 20 “The president was shocked by the diffzncebecweea the et ncome an he cath ow Bigares = Gay Cat dowHe decide to bre this $1,350 difference dawn ino pies, Fit, setemses eee’ recip by $6500 Revenues Recipes Dien Second, expenditures exceed expenses by $5,850 si9so0 aged 1380 Exec S580 irene “The to together expla the $12,850 dierence: $3500 Revenuer— Reis S550 Esendaure apes Tod deen § Although he was fling beter because he vos begining to understand what hap- E pened the president fe he eee to examine the compass couse ements lcesstanding. He ake the cone fo sow him the company's asounts aad ny anil statements thatthe cater ight hare repo “The company’s acount are leptin asl josrnal, shown in Exhibit £5, All of ‘he companys operating tension for the i fose month ae etre nts a ta and ate posed to Tnccounte in Exhibit 4 The company's inane Wetemens prepaced at he end of Api are shown in Fuhbis 47.4.8, 5nd 49. The present was eke 45 ly aad E way Macc : Emery ans pe sas | con ars ca ss Accounts Reeve 2400 Accounts Beebe sa ‘sa 200 ‘le S200 conf Goode 130. cat of Good Sle 3900 Inventory 1950 vente 900 [ (Teor ps 0250 inde foe) Cah 3001 scrans Recable 3900 ebranry (sed purse 10 un les of 290 as ven soon fn calecson of avount een fo IS) uaa ca soa keraary) ‘oi 5900 Apa Cont Gods Sle 2s Investary aso me ams coh sss0 cat 2.500 Aso Recah 00 ‘AecouatRecble 2400 ‘ale 0 (orord puch ef 20 uns seo Sus, Ca of Ga Sold as ed ealeclonf cman eel fo 10 ut ld Inventory ass ineouary) cas sa00 Acsnun Resale (recap of 50 250 lt, ‘nud coletin of soa cil fr 200 ui ldBehiit 46 fades cot ‘Accoans Receivable ES Ge Tia. a00) bo Tan Fek 3900] 3800 Mae Fh Maz 5200) 5200. Ape Mae Ape 6300) ae uty Commi Ste evens Ses txpenes Cost of Gnd Sold be ‘ce i ce Be ce ] 7600 ae a Te, | | Seo Rb 2928 Sam Mee Mar 3.900 | 500 Ape Are. 4008 pau 6.7 ‘oly saa ste ao ee 3, 2008 Tey eae Stems asses cob soa ecovntresieble Inventory Toots uzsso——ToullilesRequy $1250 ‘ota ay Company ys 4/30/2008 se 00 0526 ne si550) siga00 est ss Indes coreect profits fr the fst four month of operations weed $4,350. Unfor- "tly he controler was also coet the cash balance own onthe balance sheet, ‘The president can wee Janay 1208, balance het a Exhibit 42 and Apri 30, 2804 balance set in Exhibit 1.7 ht income taterent for the pecod Fansary 1 ‘Apt 3,200, to understnd the esh fw, Assounts Recrivable wee on Tantary 1 {0 gre 0 $6,500 2 of Ap 30, 2008, “bs sequal, and not y accident, to the exes‘ewarten 4 svavenenr oF cASH FLOWS: OPERATING, ESTING, ane FvaneIne acr}¥Tis «77 eat 49 et Stee 208 atl Ty Comoe, teanoan amano ah es "Ysa 30/2008 cosh om pean: Collation om cists suz0 yen tsps 190) etek ow fmm opentions 37800) ash oom sein ‘ale common stock 30 ‘Net ow oo cos sts, Ap 30,2008 s 8 (Ga anes aay 2008 ® nc (cee) neh fo of evens over alctins For Tt Toy; any reves tht or not rr into as by Apel 0 re preset on the Api 9 balance sheet inthe Fun of accounts resale t Pe ae bral on the balance sheet prevents amounts recognised gear by the econ tt yet eet inch rts the fet hat accoents recivable san ‘see ea fre es inflow. ‘ily nvetery was 0 08 Tanoary 1, 2008 and gre to $5880 a of April 3, gos This incre In imenton sa to Ke exces of expenses ver epeNSS 2 sane ih be cst ofthe dls For Total Toya amounts pent on dlls at yet sold eet he Apel 30a set inthe or of inventory Te restsesthe fs ha Heer cae at fe eonomts bene Te wl be ecogniaed as. an expense {Eke ptiod hat itt cho against the even cared by sling the dolls "Sly iffrenes beeen cash Bows abd nt income fr Toa Toyo he shor falloff Ty's cs om atv to its nerinnm re oat te ieresse in asco ; reese phate inrease in iveron: $6500! cee in acouns ecb f $550 lcrene in verry SEES) Dice Beem net income an sh Sow though not happy about having ran owt of as dhe president of Total oy was much norgutsed wits undestaningo hesitation Interms ofthe company’s Teisna Shem, tne profit earacd betwee January Land Apel 30,2006 is elected ae eee in ke companys et ste not derived fom expt assactions wih s12aso Neva on asna008 Netcom 102008 ear Anant cnet by overs et income ot 03008 ‘Aan crease ia et ses dogs not nest ply an increta cs, The eom= anys na sts intend ba he compost of Ws ait lo changes By Api 20, Eithe Sompanyt ant wren the orm of counts eile and invertor. . fhe Tua Poy Company example estates tnany important points is acres acconing income statements and balance shes eellect economic psiormanee. To Meee sBcame foundations ae soli bus dlls fr S19. and sls them for78+ rast) rannanensnts of aecouwrine 506, an demand is expected to grow. Thee economics pe elected in the company’s ening of income, Sovond, 4 satementexlly teaching cashflows i wef You {ovtopend acca! counting isn sth grocery store only eh The talement {Gf cih fw i an important addon tothe income statement and balance sheet, ‘Tied the company et income, Balas sheets snd ead Bows ae all elted. Solid tinderstanding thee eationship ie nsestry incompletely understanding the com pangs financial piformaace and fare preapecta "Te eotnder of thir chapter ble on-heepolats: Total Ty it simple example sithonly ne produc, thre kinds of sc, sad no bites. We now yout mse com [Bet how cash foe stents te consuted for more elite tuations Ib doing oy we wl ee even more deal ow income statements, ance sess, and cash How fhtemens se lata, Construction of Cash Flow Statements “The cath flow statement ie one ofthe ass acountngsatements, butte from the income sateen and the blue shet in many important ways Une oder ac “ountingsotement the ith ow stent ocser on on ene eanare, cash Alo, 2 “tow secment i onanined around pragmatic daseatons of anes activites, ot exomie cone ‘Sue diferencebenser cash ow taumentsand the other scouning statement is hat new acount ag nde scum he nfrmition presented cash Dow Statement Defining ach Hoe sterner rques ening the sxmantalesdy com piled forthe Blane shee abd income seen, Performing hs salsa be done in Sent vo maya The eth ow etement al reflects the ay this analysis was done, ‘Theo ind of eash lw statements rede method and inde he Sterns tem on mao cera fw s+ nen the ed eet at. Direct Method ‘One wry to proce cash ow statement simply to nae the cas account rough Thedinet method of othe direct method. Aer al if an item (2c owt must be efit netics to Zeningcath flow sateen Case Callctone om customers roul in dbs to Ca, a des meet of proceeds Preenb cashflows ftom, fiona lan or sof eomon suk. Fayens wo supplies of merchandise ventory Craton tmsot ce generate croft Cah The deal ofthe cs acco opti these amounts, pos sand sare the begoning and enaing ales. ‘baling the cash scent involves ging through eck ety ia te acount and dering is surce We identify amount rom operating investing, and Rancing “urasyagregae thee by some sppropatest of caegorizs and emp the cath Dow Sateen Le apy ti tecgue to Web's as econ Recall Ie cash T-ccouat es 0) 1 fue 90,200 ee "iis and 2 seul fom financing ster. try 1 eet the sance of om TBE Sar} mon sce Baty 3 rela the nner of tons pale. The ais are he oly 2) hwo | 7S (2) a a ltd to Bnncng Theos tol 0 $00 thos was provided by fy S| "1 16) Webs tnancing series tira] 21) apetmesing sins ze adr ua dows Webs bough compares and of {3 am} 2 gesequpment ety 9 alr (Ey mere ees ihe Entry 9 ad copy o io (2) Agape Entry i ands for thedercopment of 0 We i Et 9). ach Ho 10) Pe eapenuresepretets the Por fa ogee No longer iets said {UD Setesold Aiding he souns ouch fis pubes flonase wei MoU) Riiwebls oem ace wed tal of 1,690 bound Te Ue) Ehevcmsningetie to cash must repraen ca vs om operons. nts 5, & Gh) 1s.anande we cen bom canoe Tha ul 1495 oorand Ene 46 iis and Ste expends for opting Res renin fom no supa 3a {aor to commision. These ttl $70 thursnd The net sh Sows om operationsERENT ENE ‘ xb 4.10 Din ete how Senet 4006, MIVEETING. HE FnanCIG Aerie = 78 43925 thousand (51485 thousand ~ $870 thous). The sum of es dows from ‘anciag. vesting, and operating actives $2.29 thousand (9,000 + 81,090 = S825, ‘Bouand), the dang in ash over the peo “Webs csh Hw tatement fo th ee ix months of operations in 200, prepared ‘sng this dit approach is resented in Fah 0. Date the specie enurae ‘ent ofthe FASt in FAS 95, ew companies porway thai ca Hows using te det ‘athe Mosse the inde method. For ekanpe,CACI and Oshkosh both us he Indie method, ad ter cashflow statement re given la Exhibits 411 ad 4.12 “The indict mod usally sems myers to those who fit coaffont it. One ‘ofthe primary cae of confusion the may the deriation of ch fle om oper fone tare wth ne income, a sowe in Exhit 411 and 12. We already ist the [rounder for ndersanding the ndiret mend As we wile te inet scthod eat tne ‘sate of a8 Flows Fr th sie meths ended ne 20, 006 (noun in tees). Calesinns om cates $95 labor ‘am Re 5) Commision (@ Diag ad stbuton 8) Insane 05) Otter 3 CASH FLOWS PROM OPERATIONS rac Igupmet cpr permdsions See Intra ihe (CASH FLOWS FROM pevEsTING Sima ck 5.000 onde 2a CASH FLOWS FROM FINANCING E500 eaiag cash nding ct "1 iit ind company tht wt tr sutod. Cama ted the dict mba nt 197 MCL aod te det thod ut 1905 ats now we eat metho20 + pant 4 roneaueunats oF accauyrins eas gar AE intention ne consotated Semen of 3 ows Forth Yar Ena ene 30,2001 (Geounsiathoweande) Recon fico to eta ed by opening sire epee and amotton Ganon se of propery end equipment Proviso freed iam ee (Ga romaleofCOMNET pet burners Change in operating sets and es hoot esse Pri epee ad thease Acoust and acral penis ‘Accel ompensson andbeets Deere nt espencer Tone user pale ree) Dare emt nts Otkerlane erations NET CASH PROVIDED BY OPERATING ACTIVITIES Acsustons of property and eulpmet Parca o bine Proced fm fbn Proce nal af rperty and ment (Coptalzedstvae conan the NET CASH USED ININVESHNG ACTIVITES Prete under ine feet Payers underline o ced Preset rm oc options ‘Pach of men ne for eaney "NET CASH PROVIDED BY FINANCING ACITVITES ct of eang rts on sh and eullenss (Cah od eget begining oa ‘Cah aadequvalentendat yar (Coss pi dig the yer face ant of finds (Ga ps dig year inteokie a2 gh Cah ow Satna ‘nntoan sae, me and susaies “ mada Statement of Cah Rows amcurs in thasnds) asi rows rox oezanie acriris ation 3208 ‘Ader ecole et comet cath vied by operating actives Dereon yao son disposal fase 75 ‘Deferred income ee 10 orp neds ck rn mo eset plan expen net of onbtne (es) Changi opeting nt nd nies "Rennie ecele lena aw Pipa een ad other ret ante os ‘Acne pape ea) ‘esr bie 39) ations prope plist ond eqs Proceeds om dpa of te (Change in others "NET CASH USED IN INVESTING ACTIVITIES 2 i : meno tr dt E Ea) ‘ae : Spelt nina seme oe iE epucocommon tee ast) E ‘NET CASH USEDIN FINANCING ACTIVITIES ir) & eine rein a cath oaens 5 5ass a Cobian curios wget e Cakend an gerabnnntodelyor e (Cah pu fo interet $2 . Gon pi obo oe hits t Is estat the same ind af reconcliton ofc ow fom operations with nein ‘ome that the president of Total Toy perormec in analyzing his company’s cash ow. Oe likey reason mos companies use the inet method is that GAAP requ se: fsneaton of nt income and eas Now fom operations. Cit 413 present the re. E elation of net income an cash Now rom orertion presented bythe Union Pesekiit 43 ‘ont and ano romaine Het Cate Som Opens “The indice method of reenter {terse shows br et. insome mast ated pebeck teat dows ‘lon Rasa Sota and ano Raconntin of Hot Lose ta ash Fw fom Operant Foc the Yes Eel Dacor 3, 2002 Neto sas1y) ADJUSTMENTS TO RECONCILE WET L058 10 NET CASH PROVIDED aY (USED IN) OPBRATTNG ACTIVITIES Dereon nd aon $40 (Gains oa sie of property nd expat 18 Provan for dbl sunt “ (ines) deren ate Desunts rerable aw Prd epee 5) Otter ase " nea (ee) in abies “Aso aye =» ‘srt as) "TOTAL ADIUSTNENTS Ban [NET CASH PROVIDED BY OPERATING ACTIVITIES ‘sis ‘whose direct method cash dow surement eppers in Exhibit 41 Novice thesia {etween Union Plat conlation and ‘he indivet method cash lowe tatrents for CaCl and Osten, Indirect Method “The indirect method of cpu ath Gs uses the fandamentl accounting denity {oti derive cash, We gin by meng out the senanting went in gester de ta thn prevouly. Inport, we septe cent rom noncsrent scouts nd we Separate cash fom he other current ae cast cones amines omen cunnentassers} = {woNcunneNT Lames [NONCURRENT ASSETS QUITS ‘We can sole the preceding fanduena dent for the amount of sh ‘CORRENT LIABILITIES NONCURRENT UABILITES cast ques OTHER CURRENT ASSETS NONCURRENT aSsers Now ash ows the change in cash. Let Ce denote he ening balance of ext and Cag ‘dot the beginning blancs Ue smart to denote the ending and beginning talances of other erent snl (OCAgy snd OCAypy noncsteat sets (NCA abd [NCApy, arent bes (Cp sod Cl) soncurrent ables (NCLgq and NCI, sd equltes 1FQpn 28d EOgy), The changin ech i=: : Gen ~ Cop = (Clin ~ Clg) + 0¥CLen~ NCtye) (E09 ~ EQ) E Shea OCA) = NCH) = NCA E crac youre tt ht epnon works ineing he epaning and ening : talc for Wl (ae Ea "Ar hs quan he ech lw cystine igh al ter men : one ough covey ets bean te egies ove and Ue pet : acount The eh fon ction expres hc fw of an npn i te 3 St ie stn on the ance shee, Operations eaters ely cae E ‘tse ables and ay scan avenge ont ey og ern E Sav corns Facing es del tla ern lay nd easy acount E Ant ean ego the cal flow eqn tele espondone & ao ~ Can = (Chen = Clan) = (0CAgg~ OCs) — (NCS NC t tag NC) hy ~ Eas & avert & ‘Cash flow: f ‘Changin uot nits caren sets (ough, opting tes) B = Ghat pcrurent amc ony veto ea S Changin poccuen kabheseuphy arin tes) EB thang in le (oughly aang ed open es) ie Thief fe counting esi may sea impo and une, We devon i a woe ht ples or appleton ofthe det meta the egaton Fon e [Eli or undtzanding at the ode Coe or empl, he cate in gay e {Exedo bath operating ancgcah flow Some ey cana chat Come e dRon Sock and lain Pan Caplio faning Reine Exo i meer tt fo both operting tnd ning Retted Suse need byt é Income ad deed by ne tr hh se Ste sth ow fm penton fe : tine! Exide by tn pepe of ath den Dien pment ee i famine, ; Thc y chance svees eget and die will nt dey coreond to E ca fo For tana pata lo cstomers on scout Rees re i tet team ca cs To ee rere oferta eth Dove ut cn i Teer scouts etl svr in tnpa of des ou ene pce aps : ‘is en Tl Toy Compay cer in tech. E cman Beate ince by Sts Sete by Cath Coleco. A ; “Tacun pte proved in Bue 32 b ‘otc that whi inthe ino stent es reve, peas on the ef-and : sie cf the Tacsouat Thee ido fom lth allen nahn on he gt i and of te eon Tissot ld pear on tec ow semen The f ‘Etteesbomen ther we manor on be ep epund by th change ihe Ac Q ‘ons Becehthce Ie hues a ceva dot chang fe he ep E ington ofthe poriod hens eens woud bcc quate coletons E ‘rom sales. (Think of this situation as one where all sales are cash sales and no accounts reccabe ie Kept—the lines aay stay tao and weve bangs Now, Wied te felaneintecsvables inxs fom the beng tothe cad ofthe pti it means ‘moreslr inthe income atment) occurred thine lection fom cusomet (he {sh Bow statement) the ae of Webs, th balance in Accounts Reeable went fom 80 to SO thousand. Therefore, the cash calectons from eutomers wat $10 thaw fand le than the amount of males evenue ia he income statement hi. 10 shows that Webes collections fom cuxomes are $1,198 thousand. EB 3.6 shows that Webel evens amount 0 1.05 choad, crac $10 thousand more than eas co lection. "Why go oso mush flor? Beau we arrvet the ca eps ha ae part of op esting ath Rows eithoat Baring to naj the cs secount eat we found one oFgure 82 Laan Arinsions}—_thengredint ofthe ah ow statement “direct” The nest metho of Bing the Demme ecb tacts eth Mow sateen srpine itechniqc produce the nie amen suite Justin forall the other crent set cere the nonesren ase scouts the ue Ibi secouns and the noncsen! bi account Therefore, the ndest method of prevntion (decreases the arying ale of Sted ast Ia hi sense net name eresimates cash from operations, and deprecation should be added bac ta et income to make the estimate betes The flowing entry dos jst that: (2) Cash (Operations) soo Accumulated Depreciation 000 ‘Nov otheritems inthe income stm such as smtonzaon of rine ong term assets, are conceptual simar Io depucision and for whic net income mst be a- jase Rentember expeniture for noncurent sss ae tobe included in haveing ‘ection ofthe cash lw satement when thease are aquired. As with dpreition, the {hing up of thse ote longterm arts spot an operational ash How. Thus emit Md back'io et income the amortisation af the ne, copyright soars and Intros tase inorder to get the ae income Eigse hover to meeuring exh fw from opera: (2) Cath (Operations) 750 Web site 100,000 Copyriht Permissions 1.0% Sofware 1200 Free Ase Rights 2 ‘00 We already explained the adjustment for Accounts Receivable in order to convert {ales revere eat Hoe om comers. (2) Acouns Reeble 1000 ‘Cash (Operations) 10,000 Inventories ar petting assets If avery lees incase ove he period i means ‘ht puree were ager thn the amount of inventory sown obese op (oa of good so cow of supplies) inthe income sateen. (5) Supplies so ‘Cah (Operations). sto | Simi the increase in Prepaid surance during the 6th esod was paid for with eas san operating expenditure ands not elected ia the income statement (6) Prepaid Insurance 700 ‘Cash (Operations) 700 ‘The same argument hols for Prepaid Rent and Fred Tephone (2) Prepaid Ret 700 ‘Cash (pesations} 37500 (8) Prep Tephone 1.000 (Cash (persons) 100 Soft everything we did accutately measures cash Dow fom eperatons We sce « few other seme norte atte) ate on thst ther sefine our ete of eh Nw fom operations, Now lets consider te changes in acount values of some ofthe Tong-termascts In Fubit wesc that holon balance went ram SDt9 $97 500cageten 4 staenens of ens e408) OPERATING, vesting, ana eonapeine AeniITES + 87 ‘Butin Entry 30 acount for amortization we edited the softeareaecoun for $1250, {he amouat of anortaton forthe pri. Ths the ony way to ust he ending ‘nce to db the sofware acount or $50.00 fH indiene th ac ot fo ‘ei the sofware daring the peed and represent an ineting Sti. (9) Sofware sooo ‘Cash investing soo00 Sine og applies o equipment the Wa sit, the Interns aces ight. (21) Equipment 0.000 ‘ash ives 5 00,900 (02) Web site ‘Cah (loves) (03) Imerpet Aces its (Ca (vesting [Nove consider Woes Expense and Wages Payable. Wages Expense needs tobe a juste bythe change i Wages Paya in ores ge the operational cash outow for ‘ages vig he prod. Ths loge sac sesame as wth ecetables, excepts 00 Ueethersde of theBlace sec fWoges ayaa onthe pviod then Wages Expense oeresimates he expenditure of cash cn wags (04) Cate (Operations) 33000 ‘Wages Paya 33000 “The oher vo short- em pajable secouns ries and accounts payable ae a lyn inthe same ahion. The fling vo epsining ural ens reel (15) Cash (Operations) oo Inter Pyale = 66000 (19) Cah (Operations 2.900 ‘counts Papaic 900 “Tae only two scents with “anespained” change thie point are Common Stock snd Bond Payable Ths changes ae est xn however They ate he to fnane= ing soures of enpialfrthe period, (07) Cash (Financing) 2000.00 ‘Gammon Stock 3,000.00 (08) Cash (Fzancng) 2.00500 ‘Bond Pajble 2.000.000 Alleighcen of the preceding explantions ste entered nt the worse. Te com etal woah show in Eb 15. Proparng the stemeat of ethos rm the completed woskes is stright forward ak The orkshet eps us account forthe change in ash apd ssi dhe ems Inte operating, investing, and iancing sections The presentation of sistent of cash gE ow that uss the nde etd flows the ogc suse ear. A shown in Ex- E Ibid. for Webel he pretation stars wth net ince sa es dure to E Servet eth dae fo operation, We get te sere rgades of wheter we we E {he diet or the indiet method» ft tha waded y he ternative expin E ‘on ofthe indeet method even ex E Alternative Explanation of the Indirect Method i “ou perhaps osc the resins of dct and inet msthod ct ow state k ‘hens ifr only in how tcy show eth ow fom operons i sc, anther wy {0 think ofthe first mod i that cater cash ows fom operations byxQDAL 6.25. Wea ash ost one Supp: Ppl asrane epi Ret ‘Pefld Taephone Sliare Copy Permisions Egupment ‘Aealted Depreios| internet cc ge Website Aesounts abe ‘Wigs Pele Inert aya ‘Came Sick Renin arin eel sh Flow Worksst aGARY a F008 deeseces| st lays tonm) Isl tonsa ast (Lom (©) soo ao) 030m 1) Sooomy is) soo Ja2) x2mnom 1) 2500 100 2) 0000 fs s000| fs} wo. ts) 1.000 fu) 38000 ts) coe is) 20a J) p09 jis ana 2.0 = so 3000 ‘a. 2.00] w “Si900 Benning bance nancing 10) npo0 (2) 000 3) 7500 (au) 38000 ts) enp00 (09) 1000 x17) 100na00 cs} 2000000 ($00 (50 (7500 37500 4000 jor sa000 je) 103.000, fai) sengo0 22) 20n000, js) 49.000 Sasscnneven 4 siargusnr oF eas ftom: ovenacing, HESIING. AND FnaNEIS AerTOTIES + 89 abit 15 Ines ae ow eat me Steet satan of 0 owe orth nthe Ended Jne 30, 2004 (eaouns in bends) ormastos: Netincome 5 700 Nok pens otregulng ash Beeston eee 300 ‘Ade pss rent bes ‘wane pyle 3e Trees pale ao, ect se 10 Deda cement ass ‘Aso eccnble ro} tnvetory 03) Prougotancerenticsbone saps (460) ‘CASH FLOWS FROM OPERATIONS 350 src: Web se Exsipment Coprientpecnsions Inert ce ih (CASH FLOWS FROM INVESTING ruven: Cone tok Bonds ERSEERLOWs Fon INANCING Netshow $20 puessng tht equals nt income, hen making adjustment o bring tht "us" 19 oe rm operations. "Thc "guc het as How rom operations ul et income i refed in te frst enya erotic that eat et income ite the ech fw frm epeatons = ‘Soa por coc ths enty puts the net income of 370 thousand as the sting point {brie derinton of cath lowe fom operations Iti impartant to ote dat ping i the nt income of $730 thosand is ey just ashort way of pain ial he various eth compre net income reves age expense, commusions deprecation and Sethe austen on the ch low worsbert ake these components of pt ncome {0 their as ow courerpas "Sib any top ow ns proces for Web gives an explanation of ow the amon the income statement ae modified by the adjustments eld the proper ‘tow amount for eash flow fom operations ttl the net income of S730 thou ‘nH ade tothe ets oe fom operations of $525 thous, We ate dis ed fow the adjuament for change ip ecountsreeiabe gah venues 10 Bikes fom casomers It vwll worth your Hime to go through exch ine of Ex Wee tv and see how each ahtnent ele oiag the income statement Kem therte ict aid ese rh Fons ‘re Opa cous seat case Flow soar ‘walrevees $1505.08) ) 814950 Calletane Wigs ‘00 Ba) S770 habor Aronian = PSG) Noes ite Commision 20 20» Conminions Manetag and 580 SRO Markeig and ‘isebation Sieben eat ys 3) a 70 est Depreciation 300) Nosed tems ieee os) @ 50 eno Nisan 83 GLE ed inert (5).(16) 30 Ofer Neinome CUD SD EBSD Cosh Bow fom ‘peations revenue or expense) nto the cash How fom operations itm (ether an iow oF out flow of cash ‘By understanding tha basis of the contrition of csh Sow statements, yo vel be ale to beer use the information i ish lw statement oy oan ay ‘et The nex sector tion i weed. taduces ome of he ways that esh flow statement informa Analyses Using Cash Flow Statements Some common questions pote in Sansa analysis can be answered using the nfo ration inca ow sateen, These quests ince + le ath fw fom operations postive o negative? How much of the companys erningy ssh, and how mich i acral? + Isthe company growing ‘4s long 28 operations produce cash, it isu thatthe entity wil go bankrupt, weve the Toll Ty example demonstrat bo an ent ean show postive net ame ye ran int a guiity problem, Ne didnot essnne ston in which cash ‘ow from operations i ostie and act ince ena but this stantion ea bap pon ar well Fr example ee fom Exh) tat Union Patch ow fom op atone i pose S105 thowsand, whith iste even though its ne income is sega Union Plan's nezcv cash ow rm iessing shows that acquired propery and squipment, which i consent with growth Gen that ion spent S173 thousand fn property and equipment tually ht Union Plaza acglved another hotl ‘sn, Moe Uy, parchsed row gemng equipment of Ramat ‘Rom the secnlition of cash Soms from operations and net income in Exhibit 4.13, wesc hat Union Flas ecorded depreation and amortization n 2001 of $4,130 ‘houtand The at hat deprecation and amortization esceds the amount of as spent laweting in property sad equipment soggete that Union Psza ey not av spent nough e200 to compensate fost una thoes ase Ae wl se in Chap U1, hoverey, the calcul of depredaton ct sed exactly Yo nape of ast: therefore vw shouldbe caf in drawing em eondiwions fom the ct that deprewation ad Smorczaton expenses exceed instigateConclusion “The statement of cit No eto in this chap lp week awa soars oF aoe ions coh ea wansrabe vale al expos ned 3k 2 ea anes The sepa of sh flows from operating et: eee tng acti pus understand the ours and use fa and ould Ha ee stand the ancl psion and pcoraance on orsazaton 5 mo ys of comping cash How sateen The more staghtor ea Mee ye the es neount and ised the det method. The ind rar a ne blancs sheet euston to dre the cath es, The balance set Feet aren tat we con expres the charge cas the of the changes ‘ear fea givcmnent accounts, The rough crespondence beeen cure a ee dom, langtert ssc and investing and longtr abites a 3- roan ra pwd good stating poi sing the Blancs ses counts (eave the tre sens ofthe cash Dow sate ipod of deriving ai fw ssf for more than jas erring ck Snes aoa ethod fas fr «potential nero 68 Santo repayment os proponed an or for an nese banker fo inate a ay In ctor of thte tw appitions, the problem to predict the Boe SG tof an ergantzton es ofr weil to bel p thi probes ite fa afte se oes Then pense ate Frcs ae forecasts of sales Pe urged to geneat hs income are einate 1 any cor soca ing borowing su phasing on aco tht forecans ae made of Freee ec Gen these foxes of ure income sl fae ance ses, ta a hs apple to dee te ple foscss of esh Rows. Fr thi et aa a ad much tention tote inset meio in this chpter—itia oennony tel anal devie i ts os ight. Saat oe Cemletl ouritodustion ofthe baie finance staterents. You : sho eee St it more about Blanc sets, income atements and cx aa at you did when you rtd reading his book. Sopisatd fia ao cn el for mor an jot hoowce ofthese Statements in soation, Paar cing how balance ets, income semen andcsh Bow samen asc tht achew hey atsae you ean often te th iefoation inthe tees or goer eee Inthe net hae we detonate hs techni by ae or Onling Ic incl eps fore actly iteresing Yer 1997 FEN E ine our fot ait from working baskord trom the information pr ra ead aatements odasner what bopened daring the period in question, ‘Me bop you wl Gnd eaiptensng tnd para eve interesting [ixey terms ahs coreney indies method 82 cash ios 8 iret method 78 vesting etre 6 beckngaccouts67 financial aces 7 orang sos 70