Cash Flow Statement

Question 1

Net income

Answer 1

Reference from income statement

Question 2

D&A

Answer 2

Reference from PP&E and intangible asset schedules (watch the signs - D&A is a positive addback)

Question 3

Stock based compensation

Answer 3

Reference from Common Stock & APIC schedule

Question 4

Working capital assets

Answer 4

Reference from working capital asset schedules. Increases are outflows and decreases are inflows

Question 5

Working capital liabilities

Answer 5

Reference from working capital liability schedules. Increases are inflows and decreases are outflows

Question 6

Deferred revenue

Answer 6

Reference from balance sheet. Increases are inflows and decreases are outflows

Question 7

Deferred tax assets (DTAs)

Answer 7

Reference from balance sheet. Increases are outflows and decreases are inflows

Question 8

Deferred tax liabilities (DTLs)

Answer 8

Reference from balance sheet. Increases are inflows and decreases are outflows

Question 9

Non-cash (PIK) interest expense

Answer 9

Add-back from interest expense section. We add it back because it reduced net income but it isn’t a cash expense

Question 10

Cash from operating activities (CFO)

Answer 10

Subtotal of:

• net income
• D&A
• Stockbased compensation
• Working capital assets
• Working capital liabilities
• Deferred revenue
• Deferred tax assets (DTA)
• Deferred tax liabilities (DTL)
• Non-cash (PIK) interest expense

Question 11

Capital expenditures

Answer 11

Reference from PP&E schedule (watch the sign - capex is an outflow)

Question 12

Purchases of intangible assets

Answer 12

Reference from intangible asset schedule (watch the sign - purchases are outflows)

Question 13

Cash from Investing Activities (CFI)

Answer 13

Subtotal sum of all investing activities (capital expenditures and purchases of intangible assets)

Question 14

Debt

Answer 14

Reference from debt schedules (don’t include accrued interest - that goes in the CFO section)

Question 15

Revolving credit line

Answer 15

Reference from revolver schedule

Question 16

Common and preferred dividends

Answer 16

Reference from retained earnings schedule

Question 17

New share issuances

Answer 17

Reference from common stock and APIC schedule

Question 18

Share repurchases

Answer 18

Reference from treasury stock schedule

Question 19

Other comprehensive income / (loss)

Answer 19

Reference from OCI’s schedule

Question 20

Cash from financing activities (CFF)

Answer 20

Subtotal sum of all financing activities (debt, revolving credit line, common and preferred dividends, new share issuances, share repurchases and other comprehensive income/(loss),

Question 21

Net change in cash

Answer 21

Subtotal of CFO, CFI and CFF. This gets linked to the balance sheet to determine cash (EOP)