CASH FLOW STATEMENT - Pasewark Accounting：現(xiàn)金流量表pasewark會(huì)計(jì).docx

.MODULE 5-2THE CASH FLOW STATEMENTCASH FLOW STATEMENT Statement of Cash Flow Cash Flow Classifications- Operating- Investing - Financing Cash Flow Example (Lowes and Southwest Airlines) STATEMENT OF CASH FLOW(& FAS 95, 1985)Purpose: The Cash Flow Statement shows: where cash is coming from where cash is going the change in cash during the periodThree (maybe six) parts: Operating activities Investing activities Financing activitiesSourcesUsesOperatingInvestingFinancingOPERATING ACTIVITIESCash effects of transactions that determine net income. Hint: Relate to income statement accounts. Sources: Cash Sales Collection of accounts receivableUses: payments to: Suppliers Employees Government for tax Lenders for interestCash Flow from Operations Methods of PresentationGAAP allows two methods of presentation for Cash Flow from Operations Direct method Indirect methodP Reality Check: SFAS 95 states a preference for the direct method; however, 98.8% of major corporations use the indirect method.Recent Developments: In June of 2008, a joint committee of the US FASB and the IASB recommended the direct method be the only allowable format. Cash Flow from OperationsMethods of PresentationDIRECT METHODProcedure: Restate income statement on the cash basisFormat:Cash from Sales$1,000,000Cash Paid to Suppliers-700,000Cash Paid to Employees-100,000Cash Paid in Interest-50,000Cash Paid in Taxes-60,000Cash Flow from Operations$90,000INDIRECT METHODProcedure: Begin with net income and adjust for all non-cash revenues and expenses.Format:Net Income$70,000Depreciation+65,000Increase in Accounts Receivable*-55,000Decrease in Inventory*+10,000Increase in Accounts Payable*+20,000Decrease in Taxes Payable*-20,000Cash Flow from Operations$90,000* see next page for interpretationINTERPRETATION OF CHANGES IN CURRENT ACCOUNTS IN AN INDIRECT CASH FLOW STATEMENTChange in Current AccountImplied Effect on CashInterpretationIncrease in Accounts ReceivableDecreaseIncluded in sales and income this year; however, the cash will be received next year.Decrease in Accounts ReceivableIncreaseCash was collected this year for sales in previous years. Increase in InventoryDecreaseInventory was purchased this year, but will be cost of goods sold next year. Decrease in InventoryIncreaseInventory purchased last year is included in cost of goods sold this year. Increase in Accounts PayableIncreaseIncome this year was decreased by an expense that will be paid next year.Decrease in Accounts PayableDecreaseAn expense from the previous year was paid this year. Increase in Taxes PayableIncreaseAn expense that decreased income this year will not be paid until next year. Decrease in Taxes PayableDecreaseExpense that decreased income last year, but paid this yearINVESTING ACTIVITIESInclude making and collecting loans (to others), acquiring and disposing of equity instruments (of others) and of property, plant, and equipment (PP&E). Sources: sale of PP&E* sale of investments in other companies collections of loans to othersUses: purchase PP&E (capital expenditures)* purchase investments in other companies loans to others* most commonFINANCING ACTIVITIESLiability and owners equity transactions such as (1) obtaining capital from owners and paying owners with dividends, and (2) borrowing money from creditors and repaying principle of loans. Hint: must involve transactions with corporations own debt or equity. Sources: issue of capital stock borrowing (issue bonds or notes, bank loan) sale of treasury stockUses: dividends to stockholders payment of debt retirement of capital stock purchase treasury stockSTATEMENT OF CASH FLOWS FORMATCompany NameStatement of Cash FlowsFor the Period Ending _I.Cash Flows from Operating Activities:Indirect DirectNet Income Cash RevenuesAdjustments to Net Income Cash ExpensesII.Cash Flows from Investing Activities:Sources and Uses are shown (no particular order required)III.Cash Flows from Financing Activities:Sources and Uses are shown (no particular order required)IV.Effect of Exchange Rate Changes on Cash1V.Cash Balance Net increase or decrease in the cashPLUS + Beginning cash balance EQUALS Ending cash balance-VI.Significant Non Cash Transactions*VII. Cash Amounts Paid for Interest and Taxes (If not disclosed above)* May be shown on face of CFS or in notesCASH FLOW DISCLOSURESHOOKER FURNITURE CORPORATION (In thousands)CONSOLIDATED STATEMENTS OF CASH FLOWS 201120102009Cash flows from operating activitiesCash received from customers$212,142$207,819$269,483Cash paid to suppliers and employees(225,857)(169,245)(260,372)Insurance proceeds received on casualty loss1,708Income taxes paid, net(3,938)(1,401)(7,219)Interest (paid) received, net(93)(327)167Net cash (used in) / provided by operating activities(16,038)36,8462,059Cash flows from investing activitiesPurchases of property, plant, and equipment(2,010)(1,678)(2,271)Acquisitions, net of cash required-(181) Proceeds received on notes receivable3130-Proceeds from the sale of property and equipment-33728Premiums paid on life insurance policies(767)(556)(14)Proceeds received on life insurance policies1,724739357Net cash used in investing activities(1,022)(1,128)(2,081)Cash flows from financing activitiesPurchases and retirement of common stock-(14,097)Proceeds from short-term borrowing-4,859-Payments on short-term debt-(4,859)-Cash dividends paid(4,312)(4,309)(4,459)Payments on long-term debt-(5,218)(2,694)Net cash used in financing activities(4,312)(9,527)(21,250)Net (decrease) increase in cash and cash equivalents(21,372)26,191(21,272)Cash and cash equivalents at the beginning of the year37,99511,80433,076Cash and cash equivalents at the end of the year$16,623$37,995$11,804Reconciliation of net income to net cash (used in) / provided by operating activities:Net income$3,240$3,008$6,910Depreciation and amortization2,8483,1252,912Non-cash restricted stock awards2258174Asset impairment charges3961,2744,914Restructuring charge / (credit)1,403(951)Loss on disposal of property118133154Provision for doubtful accounts6741,3612,245(Gain) on life insurance policies(389)(579)(1,576)Deferred income taxes(1,872)239(2,005)Changes in assets and liabilities, net of effect from acquisitions:Trade accounts receivable(2,451)3,0075,767Inventories(21,262)24,072(9,629)Prepaid expenses and other current assets(952)(1,054)(730)Trade accounts payable1,3602,033(4,633)Accrued salaries, wages, and benefits967(34)(669)Accrued income taxes(1,136)253(1,274)Other accrued expenses293(579)79Deferred compensation500322-Other long-term liabilities-184471Net cash (used in) / provided by operating activities$(16,038)$36,846$2,059Lowes Companies, Inc.Consolidated Statements of Cash Flows (In millions)February 1,February 2,February 3,Fiscal years ended on200820072006Cash flows from operating activities:Net earnings$2,809$3,105$2,765Adjustments to reconcile operating activities:Depreciation and amortization1,4641,2371,051Other1527970Changes in operating assets and liabilities: Merchandise inventory - net(464)(509)(785)Other operating assets(64)(135)(38)Accounts payable185692137Other operating liabilities26533642Net cash provided by operating activities4,3474,5023,842Cash flows from investing activities:Purchases of short-term investments(920)(284)(1,829)Proceeds from maturity of short-term investments1,1835721,802Purchases of long-term investments(1,588)(558)(354)Proceeds from maturity of long-term investments1,16241555Fixed assets acquired(4,010)(3,916)(3,379)Other505631Net cash used in investing activities(4,123)(3,715)(3,674)Cash flows from financing activities:Net increase in short-term borrowings1,04123-Proceeds from issuance of long-term debt1,2969891,013Repayment of long-term debt(96)(33)(633)Proceeds from issuance under employee plans149176290Cash dividend payments(428)(276)(171)Repurchase of common stock(2,275)(1,737)(774)Excess tax benefits of share-based payments612-Net cash used in financing activities(307)(846)(275)Net decrease in cash and cash equivalents(83)(59)(107)Cash and cash equivalents, beginning of year364423530Cash and cash equivalents, end of year$281$364$423Supplemental disclosures of cash flow information:Cash paid for interest, net of amount capitalized$198$179$173Cash paid for income taxes$1,725$2,031$1,593Noncash investing and financing activities:Noncash fixed asset acquisitions,$99$159$175Conversions of long-term debt to equity$13$82$565Test Your Cash Flow Statement Knowledge1. Did Lowes inventory increase or decrease during 2008? Inventory increased. The negative number represents cash expenditure to obtain the inventory. 2. Did the amount of long-term debt on the balance sheet of Lowes increase or decrease during 2006 to 2008?Increased tremendously. Cash received from borrowing was equal to 3,298 (1,296 + 989 + 1,013) over the last three years. 3. What was the ending cash balance of Lowes in 2005?$530, the beginning balance from 20064. What was the most likely use(s) of funds generated from operations during 2008? The 4,347 was likely used for 4,010 in fixed asset expenditures. 5.What was the most likely use of proceeds from borrowing during 2008? Borrowed funds were used primarily to repurchase stock. SOUTHWEST AIRLINES CO. CONSOLIDATED STATEMENT OF CASH FLOWSYEARS ENDED DECEMBER 31, (In thousands) 1999 1998 1997 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 474,378 $ 433,431 $ 317,772 Adjustments to reconcile net income to cash provided by operating activities: Depreciation 248,660 225,212 195,568 Deferred income taxes 142,940 108,335 81,711 Amortization of deferred gains(15,172) (15,251) (15,414) Amortization of scheduled inspections & repairs 28,949 22,763 20,540 Changes in certain assets and liabilities: Accounts receivable 15,421 (12,269) (3,090) Other current assets (31,698) 1,589 6,243 Accounts payable and accrued liabilities 64,335 53,194 8,751 Air traffic liability 56,864 46,737 (4,757) Other current liabilities 156 19,293 (4,204) Other 16,877 3,101 7,468 Net cash provided by operating activities 1,001,710 886,135 610,588 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property and equipment (1,167,834) (947,096) (688,927)Net cash used in investing activities (1,167,834) (947,096) (688,927) CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of long-term debt 255,600 - 98,764 Payment of long-term debt(12,107) (118,859) (12,665) Payment of cash dividends (10,842) (9,284) (6,593) Proceeds from Employee stock plans 64,288 44,272 40,335 Repurchase of common stock (90,507) (100,000) 0Net cash provided by (used in) financing 206,432 (183,871) 119,841 NET CHANGE IN CASH 40,308 (244,832) 41,502 CASH AT BEGINNING OF PERIOD 378,511 623,343 581,841 CASH AT END OF PERIOD $418,819 $378,511 $623,343 CASH PAYMENTS FOR: Interest, net of amount capitalized $26,604 $33,384 $42,372 Income taxes $131,968 $147,447 $107,066SAMPLE EXAMINATION1. Why is net income much smaller than cash flow from operations in 1999? The difference results primarily from depreciation, which was subtracted to find net income, but did not require cash expenditure. The difference was also from performing operations in 1999 that will require tax payments in later years. 2. Did long-term liabilities increase or decrease on the balance sheet in 1999? In1998? During 1999, SWA issued $255,600 in debt and paid off $12,107. Therefore, debt in 1999 increased. During 1998, SWA did not borrow and they paid off $118,859; long-term debt decreased during 1998. 3. How was property and equipment paid for during 1999? SWA paid for PP&E primarily from cash received from operations. They also had to borrow a small amount. PROPOSED CASH FLOW FORMATIn June of 2008, a joint committee of the US FASB and the IASB proposed this format for the cash flow statement. International Exports, Inc.Consolidated Statement of Cash FlowsCash from Operating ActivitiesCash Received from Sales185,000Cash Paid for Goods Sold Inventory Purchases66,000 Labor Payments14,000 Total Payments for Goods sold80,000Cash Paid for Selling Activities Compensation Payments14,500 Advertising Payments19,000 Other Selling Payments500 Total Selling Payments34,000Cash Paid for G&A Activities Compensation Payments15,500 Rent Payments2,500 Other G&A Payments21,500 Total G&A Payments39,500R&D Payments8,000Capital Expenditures8,500Cash from Operating Activities15,000Cash from Investing Activities Cash from Affiliates500 Interest and Dividends Received500 Cash from Investing Activities1,000 Cash from Business Activities16,000Cash from Financing Activities Cash paid for interest-2,500 Cash paid for dividends-6,000 Debt Proceeds17,500 Proceeds from issuance of CS3,500 Purchase of Treasury stock-22,500 Cash Used in Financing Activities-10,000CASH EFFECTS OF TAXES Income Taxes Paid6,500CASH EFFECTS OF DISCONTINUED OPERATIONS Cash lost in Discontinued Operations500CHANGE IN CASH BALANCEChange in Cash-1,000Beginning Cash47,000Ending Cash46,000Cash Flow Statement18International Exports, Inc.Reconciliation of Statement of Cash Flows to Statement of Comprehensive IncomeOPERATINGAccrualNon-AccrualOPERATINGCash Received from Sales185,0007,000192,000SalesCash Paid for Goods SoldCost of Goods Sold3,0003,000 Change in inventory Inventory Purchases-66,000-1,500-67,500 Materials Labor Payments-14,000-14,000 Labor-500-500 OverheadTotal Payments for Goods -80,0001,000-79,000 Total Cost of Goods Sold113,000 Gross ProfitCash Paid for Selling ActivitiesSelling Expenses Compensati