AFM101 Lecture Notes - Lecture 7: Cash Cash, Money Market Fund, Cash Flow

• School: University of Waterloo
• Department: Accounting & Financial Management
• Course: AFM101
• Professor: Haihao Lu

Document Summary

Afm101 lecture 7 cash flows statements and cash. Cash flow activities: operating activities: activities that directly contribute to the revenue of a business. Includes earning cash for revenues and paying cash for expenses: required to earn a sufficient enough amount to pay off debts and expenses. Investing activities: activities that involve the management of assets that result in income. Includes issues of shares, payments of dividends, and payments and proceeds from loans and notes. Financing: corporation x earned from issuing common shares and uses to purchase equipment and to invest in cash equivalents, financing: issuing stocks (+) Investing: purchasing equipment (-: no effect: investing in cash equivalents (just turning cash from one form to another, - = increase in cash. Methods to determine operating activities: direct method: cash disbursements (outflows) cash receipts (inflows, only affects operating activities, should produce the same result as the indirect method.