Cash Flow Statement Flashcards
(16 cards)
Cash flow from operating activities
The amount of money a company brings in from its ongoing, regular business activities, such as manufacturing and selling goods or providing a service to customers.
Net income
The amount an individual or business makes after deducting costs, allowances and taxes. This line is usually at the bottom of the income statement.
Depreciation
An accounting method used to allocate the cost of a tangible or physical asset over its useful life. This represents how much of an asset’s value has been used. It allows companies to earn revenue from the assets they own by paying for them over a certain period of time.
Other non-cash items
An expense listed on the cashflow statement such as capital depreciation, investment gains, or losses, that does not involve a cash payment.
Deferred taxes
It represents the difference between the company’s Book Taxes (the tax number on the Income Statement) and its Cash Taxes (what the company pays to the government).
Changes in working capital
Current assets and current liabilities -i.e., the cash inflow and outflow for the next twelve months. Examples include the inventory, accounts payable, accounts receivable—basically all that is needed to run the business’s daily operations.
Cash flow from investing activities
A summary of what a company spends on investing in maintenance and future growth for the business.
Property, plant, and equipment
This line is sometimes referred to as Capital Expenditures, cap spending, or simply CAPEX.
Intangible assets
An asset with no physical form. It’s a long-term asset that accrues value year over year. Examples of this include intellectual property, brand recognition and reputation, relationships, and goodwill.
Businesses
This line is what a company purchases for another business.
Investments
This line will show what the company has purchased in shares or bonds in various companies.
Cash flow from financing activities
A summary of all the financing activities.
Issuance of stock
The amount of money the company generates when a company initially sold its stock on the open market to investors.
Purchases of stock for treasury
Previously outstanding stock that has been bought back from stockholders by the issuing company.
Payment of cash dividends
A payment made by a company to its stockholders in the form of periodic distributions of cash (as opposed to in stock or any other form) this is often paid on a regular basis, such as monthly or quarterly, but are sometimes one-time-only payouts, such as after a settlement.
Issuances/payment of debt
A financial obligation that allows the issuer to raise funds by promising to repay the lender at a certain point in the future and in accordance with the terms of the contract. In short, when this line is negative, that means the company is paying off its debts. If the number is positive, it means the company has taken on new debt (or issued bonds).
