REIT Modelling - Cash Flow Statement

Question 1

What are the two options that companies can report cash flows?

Answer 1

1. Direct method

2. Indirect method

Question 2

Cash flows from operations

Answer 2

how much cash did the company generate from operations?

uses net income as a starting point and converts accrual based net income into cash flow from operations via adjustments

Question 3

Cash flow from investing

Answer 3

capital expenditures, asset sales and purchases

Question 4

Cash from financing activities

Answer 4

new borrowing/pay-down debt
new issuance of stock/share repurchases
issuance of dividends

Question 5

CFO adjustments

Answer 5

+ D&A
- Increases in A/R, inventory, prepaid expenses, taxes payable, other current assets
+ Increases in A/P, accrued expenses, other current liabilities
- Gains on sale of assets
- Increases in deferred tax assets
+ Increases in deferred tax liabilities