HTA 602 Lecture 3: Chapter 3
Document Summary
3. 1 cash flow and financial statements: a closer. Sources & uses of cash cash inflow: occurs when we sell" smtg: sources of cash: activities that bring in cash. Statement of cash flows: statement that summarize sources & uses of cash, changes divided into 3 categories. Operating activities: include net income & changes in most current accounts + depreciation. Financing activities: changes in notes payable, long-term debt, equity accounts & dividends. Investment activities: changes in fixed assets + depreciation. 3. 2 standardized financial statements: easier to compare financial info as company grows, useful for comparing companies of diff sizes w/in same industry. Common-size statements of financial position (balance sheet: compute all account as a percentage of total assets. Common-size statements of comprehensive income (income statement: compute all line items as a percent of sales, use % rather than nominal dollar values facilitates comparisons between firms of different size or business type.