Скачать с ютуб How to Use a Cash Flow Statement for Business Growth в хорошем качестве

How to Use a Cash Flow Statement for Business Growth

The cash flow statement using the indirect method is one of the two methods (the other being the direct method) used to prepare the cash flow statement. The indirect method starts with the net income from the income statement and adjusts it for non-cash items and changes in working capital to derive the net cash flow from operating activities. Here's a step-by-step guide on how to prepare a cash flow statement using the indirect method: #share #subscribe #education #finance #accounting #Reaction #Elevatemindset #cash 1. Start with Net Income:    - Begin with the net income figure from the income statement. 2. Adjust for Non-Cash Items:    - Add back non-cash expenses such as depreciation, amortization, depletion, and any losses.    - Deduct non-cash income like gains that were included in net income but did not involve actual cash.    • Unveiling 4 Mind-Blowing Accounting T...   3. Adjust for Changes in Working Capital:    - Adjust for changes in current assets and liabilities that affect cash flow.    - Increase in current assets (excluding cash) decreases cash flow, while decreases in current assets increase cash flow.    - Increase in current liabilities increases cash flow, while decreases in current liabilities decrease cash flow. 4. Calculate Cash Flow from Operating Activities:    - Sum up the adjustments made to the net income to arrive at the net cash flow from operating activities. 5. Cash Flow from Investing Activities:    - Record cash flows from the purchase or sale of long-term assets, investments, or loans.    - For instance, cash received from the sale of equipment or cash used to purchase new equipment. 6. Cash Flow from Financing Activities:    - Include cash flows from borrowing, issuing stocks, or paying dividends.    - Examples include proceeds from loans, repayment of loans, issuance of stock, or payment of dividends. 7. Summarize and Calculate Net Increase/Decrease in Cash:    - Sum up the cash flows from operating, investing, and financing activities to calculate the net increase or decrease in cash during the period. 8. Add Beginning Cash Balance:    - Add the beginning cash balance to the net increase or decrease in cash to calculate the ending cash balance. The cash flow statement using the indirect method shows how a company generated and used cash during a specific period. It helps in assessing a company's liquidity, solvency, and ability to generate future cash flows.