What is free cash flow and how do I calculate it? A summary provided by Pamela Peterson Drake, Florida Atlantic University CONTENTS: Estimates of cash flows .................................................................................................................... 1 Free cash flow ................................................................................................................................. 2 Free cash flow and agency theory .....................................
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Financial Statements ACC/497 January 30, 2013 Decisions are made daily by company management, lenders, and shareholders. To make informed, intelligent business decisions, there are several strategies that are used by each of the fore mentioned entities. When deciding if investing is the right choice, if a company will be able to repay a loan, or what needs to happen to make a company more efficient, the best way to get an inside look at the company and the information needed, would be to look
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Financial Statements Acc 561 David Kochevar October 27, 2012 Knowing a business and what they go through to keep it up and running is a lot of work to do and a lot to deal with. I was always told that being a consumer is the easiest part
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According to “Financial Accounting, sixth edition”, cash flow “permits a company to expand operations, replace worn assets, take advantage of new investment opportunities, and pay dividends to its owners”. Analyzing cash flow enables one to understand what happened to cash and cash equivalents throughout a specific period – how to the beginning balance of cash become the ending balance. The statement classifies cash flow in three different categories; operating activities, investing activities,
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9-193-103 Rev. November 3, 1998 Statements of Cash Flows: Three Examples John Stacey, a sales engineer for Aldhus Corporation, was worried. A flight delay had caused him to miss last week’s accounting class in the evening MBA program in which he had enrolled at the suggestion of the personnel director at Aldhus, a growing manufacturer of computer peripherals. The class he had missed had been devoted to a lecture and discussion of the statement of cash flows, and he was sure the material he had
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Chapter 01 - Financial Statements and Business Decisions Chapter 01 Financial Statements and Business Decisions ANSWERS TO QUESTIONS 1. Accounting is a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers. 2. Financial accounting involves preparation of the four basic financial statements and related disclosures for external decision makers. Managerial accounting involves the preparation
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1. In the statement of cash flows, increases in a company's capital stock accounts are treated as a "use" rather than as a "source" of cash. FALSE 2. Which of the following would be considered a "use" of cash for purposes of constructing a statement of cash flows? A. an increase in accounts payable. B. an increase in prepaid expenses. C. an increase in accrued liabilities. D. an increase in accumulated depreciation. 3. In a statement of cash flows, a change in prepaid expenses would
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Cashflow Statement Paper Teresita Napalan ACC/421 April 25, 2013 Stephen Russell The statement of cash flows is an essential financial statement in the accounting industry. It is one of four principal financial statements required by GAAP. The primary purpose of the statement of cash flows is to provide relevant information about the cash receipts and cash payments of a business during a period. The statement indicates why cash (including short-term investments that are equivalent to cash) changed
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Chapter 1 Financial Statements and Business Decisions ANSWERS TO QUESTIONS 1. Accounting is a system that collects and processes (analyzes, measures, and records) financial information about an organization and reports that information to decision makers. 2. Financial accounting involves preparation of the four basic financial statements and related disclosures for external decision makers. Managerial accounting involves the preparation of detailed plans, budgets, forecasts, and performance
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recorded in the statement of comprehensive income therefore represents the balance-day adjustment upon assessment of the recoverability of the accounts receivable. Journal entry: Allowance for Doubtful Debts Dr $45,000 Account Receivable Cr $45,000 In determining cash receipts from customers under the direct method, the balance of the Allowance for Doubtful Debts account must not be netted off against the account receivable balance. Otherwise, both cash received
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