FINA 2201 Chapter Notes - Chapter 3: Reserve Requirement, Cash Flow, Asset Management
37 views6 pages
28 Sep 2017
School
Department
Course
Professor
Document Summary
At most fundamental, firms do 2 things: generate money and spend money. Cash is generated by selling a product, an asset, or a security. Cash is spent in paying for materials and labor to produce a product and in purchasing assets; also payments to creditors and owners. Cash flow from assets = cash flow to creditors + cash flow to owners. Uses of cash: activities that involve spending cash. A firm uses cash by either buying assets or making payments. Increase in assets (decrease in liabilities/equity) mean use of cash. Decrease in asset (increase in liabilities/equity) is a source of cash. Increase in an asset account means the firm bought some assets. Group into three categories: operating activities, financing activities, and investment activities. Impossible to directly compare financial statements for two companies because of differences in size and currency (sometimes)
Get access
Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers