AFM123 Chapter 12: ch12.docx
3 Mar 2014
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Increase/decrease in cash only tells part of the story. In decrease n: break down cash flows into main business through investing and financing: solutio activities. What each looks like: operation, change in cash = change in liabilities + change in capital - change in non-cash. Assets: net income is the starting point, add: depreciation. +/- changes in current liabilities and current assets accounts: investing, financing: purchase of assets and proceeds of dispositions from asset sales. Issuance of long term debt (borrowing money at a long term basis) Issuance of common shares or ps: repayment of debt, payment of dividends.
