UNIVERSITY

INSURGENTES
SOUTH CAMPUS I

INSURGENTES LUCIA MAGDALENA AMBIA

UNIVERSITY RODRÍGUEZ

EVALUATION 3
Cash flows.
FINANCIAL INFORMATION AND
DECISION
DECISIONS
TEACHER

SUBJECT

STUDE Brayan Gallardo

NT Goytia
DATE :
23/08/2021
Profit is basically the surplus that remains after all of your business expenses are deducted from
revenues.
There are three different types of earnings:
Gross profit
Gross profit is income minus expenses.
Operating profit
Operating profit only includes the income you earn directly from your main line of business, excluding
income from external investments.
Net income
Net income is calculated by adding total revenues and subtracting all expenses: the latter include
operating costs, but also taxes.
cash flow refers to the inflow and outflow of money to and from a business (that "flows" into a
business). Cash flow is the money you have available at any given time for your business to operate
smoothly, and is an indicator of your company's liquidity. If you have positive cash flow, you can carry
out your daily activities, pay expenses and taxes, purchase equipment, stock up on inventory, and even
take care of emergencies and unforeseen events.

Company X, S. of R. L., had at the beginning of the month a cash balance of $60,000, accounts
receivable of $30,000 and accounts payable of $21,000. During the month it had credit sales of
$150,000 of merchandise that had cost it $100,000; paid $15,000 to suppliers, purchased $80,000 of
inventory on credit, paid $55,000 for salaries, purchased on credit at $280,000 a van that it uses as
delivery equipment, and collected $130,000 from customers.

X, S. of R. L.
Statement of Cash Flows from August 01, 2021 to August 31, 2021

CASH FLOW FROM OPERATING ACTIVITIES

net income after taxes $60,000
accounts receivable $30,000
accounts payable -$21,000
credit sales $50,000
Inventories -$80,000
Payment of salaries -$55,000
payment to suppliers -$15,000
Customer collections $130,000
Machinery -$280,000
CASH PROVIDED BY OPERATING ACTIVITIES -$181,000

a. Amount of income. $0
b. Amount of expenses. $451,000
c. Amount of profit. $0
d. Amount of cash inflows. $270,000
e. Amount of cash outflows. $451,000
f. Cash balance at the end of the month. -$181,000