BUSN1001 Lecture Notes - Lecture 7: Operating Cash Flow, Cash Flow Statement, Deferral
Document Summary
Cash is said to be the lifeblood of the business. The statement of cash flows reports information regarding cash inflows and cash outflows for a particular period of time (summary of cash and types of cash flows) Statement of cash flow gives information as to en entity"s ability to: generate cash flow, meet financial commitments as they fall due, fund changes in scope and/or nature of activities, obtain external finance. What caused movement in cash in and cash out of the entity. Format of the statement of cash flows: operating activities, financing activities (change size and/or financial structure e. g. investing activities (acquisition and/or disposal of non current assets) borrowings, shares, reports: cash balance, cash flows, net cash. Increase in prepaid expenses indicates more cash outflows than the expenses recognised. Increase in accrued expenses indicates less cash outflows than the expenses recognised. Interest and dividends received- can be par of investing.
