MGMT 120A Chapter 21: Chapter 21
Document Summary
Cash inflows and outflows: cash payments are made as dividends to shareholders and interest to creditors, when debt is repaid or stock repurchased, cash flows out of the firm, cash inflows to a business: Investing activities: sale of property, plant, equipment, and intangible assets. Sale of investments in securities, collections of loans. Financing activities: issuance of stock, issuance of bonds and notes: cash outflows out of a business: Investing activities: purchase of property, plant, equipment, and intangible assets. Purchase of investments in securities and loans to others. Net income/loss is the result of netting together the revs recognized during the reporting period (regardless of when cash is received) and expenses incurred in generating those revenues. Cash from operating activities are both inflows and outflows of cash that result from activities reported in the income statement. So this classification of cash flows includes the elements of net income, but reported on a cash basis.
