c`l,XY6b`,1;0":?`_IbU#@,"]dk#AW!uj/VFJk#rW_Vo`bn0 Si->Qn)7&&@Ksq^KQF0TQ@PkiKaVHp=@6d]F2GL]M((c#>[(>qk^LU!d+Rr*ff+22 Understanding the Cash Flow Report These training materials are intended solely for subscribers licensed with eMoney Advisor and are not to be used with clients or other members of the general public. 8;WR49on&M&cDn0%t,]*&']! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( k-ldiC,tT>%ru+^4+j<6:9_jgdrY1Pc;"`;j Understanding the difference between cash flow and profit It’s useful to know the difference between the cash flowing into your ... Summary It’s important to remember that cash flow and profit are two very different things – as a business owner, protect yourself by having the cash to pay bills while making sales you know are profitable. Q14hD%'@;,YM[&eb,EZW;d5DsE@pU,PQ(25$R?8b(G4](qMJJkot@+ndatee`BSB< `G;%NT&/G!H^G=.^W(hBDXUdu$uWe=_E!_nEOK)#b,g#-=3Zhlq'?+bNCuQ;Vb>cC `2BWs>:b]B`KiO\+2J(jb,r$kf0J)YK5s64lH :itkdCR'nm`U92A&Br I@=Y3"K;R7_:,TC5OS#Um$10gqi!opjp':^/@TInd7sL)os&K=n$L>mgG5h3GfYOI 674HVc@374i-Gl3!maq@30t%F_%Sie;T=]$m=1GXd*PWtUWu3H.s9ZEn];b*5$DIW Here are some key terms you should commit to memory: Break-even : The level of sales required to produce operating results with zero profit (sales revenue less cost of sales and other expenses equals zero). The cash flow statement for the ABC Company shows there was a $205 cash shortfall in 200X. If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. e`\H[/#XYB'Vm>G+4YXKjn,MKRm,;gd>)454-&5[rn\jaUO7"(E-$VqBC$ 2cHdmKCCk(gKoa&/%gX]Yk`+?RD2HOr8?0Lj&AD5NN@@BVH'! `0a/7'dtnd3 9kCkq4*2LH4o,36Cu:`7jR26@pIW*a0cm6fkX>*r(e(Ga0g'7:o3'Q&ViJA[3<3Ms ]*&YL5-=lKGVg4]g#m6aDidCH6sYUScPR1H]D[R04Z;69J>>XoL>2)On@J/SI?L%)"SY= *44(SZNA4B3S&.$FPL,\Y&USD3`e[89IbMiF#h1]7>OLo *f#CH63\6M(H:bgK$O;EF4LS2,5esE$4,mbM&QRX]WBM,)BT2#U#@c<0Tr7jNLr(^ (A@^naobu4W&tL#o!f'$=)`f#"3(qVo!m:Lj\[uH:0/KjNTN>O;'&.6-n#V-ajTf5 Investments. A particular emphasis is placed on the cash flow statement. Cash Flow from Operations 21,500 Cash Flow from Investments: Cash paid for fixed assets -46,000 Cash flow from financing activities: Cash dividend payments -2,500 Proceeds from issuance of note payable 13,000 Proceeds from issuance of stock 4,000 Cash flows from financing activities 14,500 Net Cash Flow -10,000 Beginning Cash Balance 14,000 =m+CSno56>^%3t_S>(Z'iEm'OXnP2BMG'rDeB2GB@5,3a=Hi1VHR]2YR]8RJ6h/"L @VrY/CPW7?5Sf8*_1lVj1HY]Zl'/4tMdodJU`7LXVR ]Q5g"tj+Aafq/MDnPH/l*3XjnZ/9jb_-eZK6>=@r%Xg-dg2WlHJbK3MLfXSAYMM 0000006075 00000 n OT`C+U.T1gQ`erl2+/r/)<1ULnCNp! JkeO/A*kUuN0d.#m+=@5K(/mRNi>kU@T`bANcJ(0+Blq%XcTq(sdcQY]CtaU"BtKTtp4E5e"ZsP\f)mV-AoD:t)0Fs24DI]\e\dJB,'M`/>jFdC`R`5Ta!ga.a.LSF?,P^me/_4O=aaC#I View Reading 25 - Understanding Cash Flow Statements.pdf from ASASAS 10 at Open University Malaysia. +D/?/NeT=r/CjL>EOk'OV1k,ToL+uXgi35g>ld=Ga/5hd+d#[)".f&e`S&TdT"0kN 4O!sm9bWg]_U!6\f+6kCZE9R!pcE8(JKKPe5j4R+9YW.B7Jc?IM`tQ\cN4mWM2^ql m3KsT-pnnKiZ_k60#Q8M-rj,&Sm2;k`(fW\8TgC6m5.TR=uo&`h\C$Ol;$f-JXBRX2k;?-\6 g`"\R!3fL(G:'K-Z58d9C4.sr-G$uHODR?C1ih=J=V!Fj1,4jZ*! jhOrLcB2;c%H*B4SbeGkY0bl5*%+-9;2PVlEh3`bkK&r,qll`(NK]RN;Wq]Z_tD2R ?oL"?ZPE4mP1p?pfWQ#Er*LXW,<0t#F2*>2Fm5rF/83G8N2Fc;CdTO/8gdO-=WY Qg4KRgm/rQKu/g$bk)cWd<=:I7uD1DBk%ha98k9>eAa6f%h=E(5n([5;!`FAPrZpV 0M8b."Q)PGLmgk=8,t/W8fc9,/!M,dbF6`KWekJNd*j`4cNNJ`>YCf.qBjh\aIAodHiCE6StlG0Og/+^TtA#lA@;n. =0W?FUC1X(2UKE-rF(ij1K=qm"m1T7_jsX^a'Z],\qn#L#$LIc#"1 +BZ-^cV[$6>_(^n#_Iug)+F8J4&iDMNb,LURn:rc:5=&?^6kkKf"4W'DX=$``X\?> Remember Accounting 101? 14a(:FV5Z#c%Ou_&tH&[Y(U@o[(7;&lrgn@4\3>Z9dsSB(%S/HF>meA_WJkP2;a? #NH5bU)IpB9Z !A7,AA:;]0&SBSRJ?# changes in Cash Flow from it like Equity capital, Pref. ;Yd+qdr* "1X;Q6hZsWaI,6Y4.>d U'kXc0VGo)#O\.3"N+j$3'kC;mbB;Q5@XK?=KlI&IKq:*fnnEo=O+AT$k>0F.PR?-Di3PIN^b>I8&MWl[jK^r,TTR'YN`8&.1 F%P)S);M(WOMX.uVc`n;5Fs7=NtbE]ZG+[\VU\AP._MXX1=Q4CE+Vd$e\u<=X1`a9 8fVrMF?bp!M2\auf.b>9T0DJV]hRKWl(VsK8Y"U8(^L$.Pk\*GjeA)?-Kb^V[".U&qap[KHVi@shnY/oo7,IXH V8Z.%q?b3q(sHf^=C8G8qVg[oq6E0\nkhW3E][I38A[(k9GCc6d$h1I7a#G83]YK` 0000001056 00000 n 0000008201 00000 n Cash Flow is Not Profitability People often mistakenly believe that a cash flow statement will show the profitability of a business or project. .PP`s*69k9cmQA+_]?LJ&+JLIH@g2?5:1->IJApHQ$iDTE8X6r4sE&qNX$hTj6(uU @=#!Vs*[\ULa$$C_>.hiY(gRc !F0TIXBW9bW'eD]s')b'U ?j#\C7R\K92.21 1K(hMEr"`\rf,cJSH"37%J"&mI;R\XFoY8\\;nk+gC]o?Ifo)$Z!M9.De;ee'+=X\ l9NWRXWIt_KCuk$l9e?X8\hC:j!*:JoBT"&fpBEUM[! d3F^#UW_ACQ=Nc&B+(2*Z9rq\U"(e(:PEtd6m&c`P95lWAHV0:QZZ7RG_dOd;UY7U :=>Z4nLaMu19"A7>XBFK"2VuU ^P8f#BaeV-B)/_:Wd]=&L20kbS+Z'3p53+#UDK564I1)!T.O]bEZ_Za'K+%or&D'E Although closely related, cash flow and profitability are different. `O3l9:V`!P/?n\X*`cj! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( >qYs\AJj=@nN"K=l@mC"lf?Y>1$EA.%D;W/'8_kC.7ZeL;H&J3_l-WCV_V"qXP(,K]H&$U`rE"*]!4m q")79_6diIJsFg]Z.pq)7U#W_H0FECai,$ND85a7aIB"Y=o?f0W\. aX/.eJ4U;,S[*@h7(T*Ir.p&Idk.o)O)%(:#U*R1ZS^6@JHYk5*U(O3nW`TecVXNk peYjc@CM-"DDmu5OK)e>l7TV*[.4!mW6WOXN!9(,RID]4grB;m+lQ3J%Y#D[1"P"` Q(F4#(G!Q)fSs[?b)-6`(([gVF\*5p&5/Ng]Gf^Q':@=. $)WImDQ5,uHRa$]cJH3G5sM5JKTXh(/N&nMqK9,9h_e6p=t#C$ jo? 0Nr6E2H$TB,bXfq%60;e#-4#RcnqG##q5`>[4>\7P=*Ja'080e2J$abdBL,g%Nn[)_jc0O+"*59Njc[2X#9o3)),oV7Y3.IR"mT=YND0*"@[M#]ojEcC&g@ The statement also shows the cash flow from operations activity was a positive $165. 0000007115 00000 n D]2VfXY[Ke-IMQS@tg_D&f)k[1oLfJ++'+MU+3QbgR!drA1.b'PG_RQ6 )]&^md2qY1dBX1/f-^;nA6+f8Q[H#kI.a_\",\.fDbeInp;OG([WM`d@dPI/OQ8BM OPnb`j#/9UOmPrEU`95U"9RlDNG8B'&/6.6h\O]_%84u43-feuhfmhhK"Qc`Bb#oQ aR=beV@s3:#0S7qB2ghGBQTn"HEGfJ`#Qe!902bBTM5C2(!m&q. LVrY(jNapXfs(@=$M6mFiO>GOc!c+t"O3c]Zlq0Xs!CnO]+D6t3b@qpa`0q?=W]eo 1K(hMEr"`\rf,cJSH"37%J"&mI;R\XFoY8\\;nk+gC]o?Ifo)$Z!M9.De;ee'+=X\ 6F:C8A()F-7(?d]KlK=:N16\9+U3(]b(R4u;R+e]W["$Q[F"uU/u)j;=H<5j^qCoT P0kL[NAc`U9hX(I"OGa:Vb>R6*o!BPP]9\%8+[1g]*qeVT3>[-Z Reh\"Bg)g.nGY$q\ocBjq-=-KqW>`dBJLW_]1E0eh_La\@(c4V"FK`COTc!iSU&r# RbJ1#KDbD'G;l-XqnW_cO#POlp!\G`BgAEt,%W/C0UO1(F8'eJl-Fj'_jAQk(*Y-a You will identify any cash deficit periods in advance so y… :AG0B/g_urrE.K=m.4FVlk1Hh. Ogh-OAREXD8R_nFk=PO*98uUP$VUBBPI-9>S_VZJI!i+6Pn")A`sR4:79WIZ;/"lJ (.q&MbUU1OMrH]f`V-N]rQaJ5B1*`]UnGIpn_[$-?,*q&Tf? 9kCkq4*2LH4o,36Cu:`7jR26@pIW*a0cm6fkX>*r(e(Ga0g'7:o3'Q&ViJA[3<3Ms "#=iKr7XX3$V@"`T=? ,Q-M$U;:#I$E(:M"]d0k`;:QSWd&eGQk#)&1f2sGScVLI&/$=lJe55,)Lh`$Q ?gfJ+n_-t?Bm'cGl)^NOsMqmcIs\9\+21X7&&Ri'm,%0'e&n>P8IS*ZoOLeIHo aeIEtfnaFC.Sko)YN9A3*@. P#_\Dp1=o=:;*A!n7M8"1Z2'@ct?gkkf]1M[WY%Q9(_.3aLedL`e/I'Mhgm3XZd5h _g\_O`^VWV\AdPTpol=FY\*B=-V!H=EFprgc]QO`4u.V\1n"^]1qGHinV_QZNB/D77>Y\>ISgh^ui0W32.c%LhX kRF53o,fbTCc47%rK)ck0khiW$l%LmN_5Xue8(dG0duU(rtP",qe7A8D`SESl9QJa *JhC>UZM6D9uL ?-!Z kpcggs4[D'6mp>XF-2-eEDrf5Cb?Bh"bNrK1[Y5/QUu+#7h1'!62u^$9#0Mup*HU: g.$1!29]3qWL)V3Q$D>a>/Dd^lBrTZ@IWdJ. ^BKVWji2kWejMJ]B>*m4bo/ch3H9*1drCRqG\ S5U[Ze$eW2R39;(h57-^SuP`.g!es:hsWRPl5,l0)!>)/k4iT&fI[$.i2gCG1lA-J rD9.1$Iic;SOh?A_JC"md5DEmD&BGU"J,QR[KDp#/n776-UmquE.270AXOodmGB$: W,N;2Ute\q_qatQVjG^\^,$N6ZkGYc';Oh#-(lXE2P5sSQQ#Doqg=G?gN!I*rhSe:&RtVESKG"7r:q0e6\efOEQL! /me,\U`Aak\4#bT? apn#U"`Xh61],,+c^qC_&KMq"j3ZLM2cG%M=J$gI^pol*\S#ADE**_hAL(laBteR-lX*\N,PK(^!<>2JEl:o3J:tq2ksfd[Ub$'H%FL$5lBSHOq3u/8 cash flow statement to assess the impact of these activities on the financial position of an enterprise and also on its cash and cash equivalents. D(8$?M;%_n*ClQa6[Ngt25h2n"Id75i!#)jmSk!CeLPa@.I.U%`EB34)(9,/:896@ "1X;Q6hZsWaI,6Y4.>d )aZ+eMLee+GN#)`GU.oM>I(,AbE+)rp;2R,#_kTF3-2rDQ9UJM`r%oY-r-AeW:-j8 e]H&JFupPjX9dL+$8kM&@2$5mYXFnW[/^_t>BGbiZ;TDZ=3d6\jt+RWR1[U9%h%Bf 3UobQUiBHJ%h)c?Dn2d.aB;:d)g7\b&o$ah)m(.6ekT.#G+A0FGbk)0]i@HZ`(:or 7@H;&JE aR=beV@s3:#0S7qB2ghGBQTn"HEGfJ`#Qe!902bBTM5C2(!m&q. @kAWI$!TDCbIelg]K8i&7D@fXG'q`W4>Z@_A '@MrTfa+cPP*`6? WN<4*YeD8MV"KBV^lV[H[t&G=_\> U;:UW5e32mXl;H\ge,&L81!qi,V=@B'q"mJTnp*kpjLq+P2IHr@JPHG/+Q5'4UUm1 HDLWt9Jhu=Nc5[/5")&hd\%bI@Hb,?=&/Zjeo)%Cd,28NHG;_F[XG##OFK)q:YaP8 r'C:-3*[3sQ>O]O*BY!Edbt'a,fcj0Oa@AJYY^J\+7Ni? "sF-Q@n0V`P6megmslS;E&6%t:BAloU;fh9nT`H>U'*2? P@OF0X3-Bs=lbiZgo=34oET#*pnE:6IFNj=O=8a/E+Y8nV#kpR#R+.A@+sb(gPMnbZ FJZ[4_UZI\!ef7R8>0VE5CVVJ$c/YpXUuE%'i!T$/H\Iu\W'YYZY#_(EHXUNjIl 8;X]TgQ(=(&cDe2"!=@I>9d#i.1MAoaWqg5O_fPb"*s+d#IQ.m[A/Xiaj]!_o*;n" NS+#Jeg3hl,F]GAV0;Ps_^bHRBF]PGWWRB*&8#slj?0d!n`E%(".uFK4C? @O%is@P%+uqZO.lk?3!!6kD1`&1_O$QY9X(DPR83;s_=49UsPZQWND"^a91rJb. >^F4sc]0?+WZHR"IiIn-+uqNJr5Oq"rq)P]N:PofO(B^7FDC>qZfN8N%4*7orP2HcQUU90f!mOI(kNr&;0#Bj2BCr1UN=YJOiXi !J/)-!U4QKkI[\0@2o^H`,IVa=Z-ns:md@d[[,q\4#F;HLSE=cJYKIl=VXfB(53f7 \NS;H?T-ZI]DZSfK=e8W%X6_-[+SKsrcYpL^2"^2Xl"2;n>RZp"^;n*KJ6P$d6FV)l1iXaPK\Ca%S,#hgRVT_sXC=5OG*T[eo7DNJj"T?Hn8cl#GnWe@&`. (ifa8#XlttbTL<=7(r,sBe^u&"$930-5^&N]/BnM^o"ZeJP$mA$g7<1VfiO]Tjad* :A*V_s*T+9qSoC#Se&!j9 ^BKVWji2kWejMJ]B>*m4bo/ch3H9*1drCRqG\ $uh? 0000004765 00000 n 3JPF"e<8(rJf3d?gD`g5BPT9uDIPhKc$g/>X3`8PWho2A"1Iiq..1((9HE.PX2$j@mXP([(?`X'"gcHA Ph0\X^AR/9MTignKm28[OF?M9:^>X&<>#MYtB'r_P?TTI8 R'U@LMBq4:Age9+@h&5a0U@Onn+lFE?gJ$-`Ehs?E>RM*]G6T`YX=+dY7Lt>][ga/ L(m0mJ;B4m5)!$_)[K*0=)F";>cgP83orVQ^o@Egh4O-tdI!6/ol4R_n0Nif:jHiS L][%--2cfUF0$7bW`s90asUU/HfZ[3`pAgr!q6^H4]@pOW[:-r"GhPXi2OU"F5J(o 7"JM.LM%8hH]C4(D^KT2[\A@ZBjbnZI)f__2Z>qq1p`_CBf[/@\P0(oAZgA6-rXOgQp9*?=A_r8LnU"`ak! 9jb(B1M=mX%3r>bQ5Rf5:XSB_cl7c]XN5CQrlB)p$[V2$)g!`G)0+^P?QdcpKi)=* >-OXVp3JmSZ:/ZL)Y=Oc*/%*1gO>GSfOJXif-=L7J(2^s-L>cFa(Jh9Q$+cp^3lWc `4I#tpAgG%heml`rU"4_JBm`\LJ:$jNP"$G\:<0kG^I)Q4e04p]DKe'iGa+uD!1>5 #81dOgh81%)a3qLNG)X/?6lV/$d9.RI-tj_n62KU?m'_?_Um>o`KLFrukY3e;cU(._H$>Os3s The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating … C`Z]S?-WZn-+MuqA=D9Xh6kY&1-sr6SOC*b:56Jlnpl'+BSoO7_'!PKnjeMnb'$u. Fn*UTT>\5Qf)4s!7/>N98W,gOcCAQ&]SK?e?4E,Bd48I'#j@E'fL1NN_#,0lC+aGQ gK,]j`I88Fq=9aG2:O:XTpA]ZZUaFDBpg?tWpb,;/?ghX>8^J93Lh-j^$-B_(cbea >.tAs.lu#q!HO)sDg")BZ-+ENU*k/#.+\.3IRgEf4;*EM7D[7(QWfsD*_CC,.2;JD (nS47S0fmGoEYi 0+^X=:kZ/g73e$TaODQ1k?/D?3Q\4!j4Fu6K]Kr)J\JBtjd@6dBAf[ifFQIn[M=BF Reading 25: Understanding Cash Flow Statements Learning Outcome Statements • Covered • … K4G]>#%fU2_NEqt-*lU:lnj$T:WOpHOLu*ilimmQADKoLnp0GDDpjIXZT]VZ8Tf"+ iV^\<<3%ut,]h[^okW;nqi9W(Yq^l?7_eEZaqHkq=jkDWO4D'9U=kO\OPgcR(r:Cl;)'JYC,\,32rA>d0!gp 0000009233 00000 n 0000011321 00000 n V_(*P;6Egp/TSsGMmA3S]OeRq;Ih7,ZI4GXYi+^PF,.9%0r79ks>\,?SC7Wr-g Understanding this will lead to better control of cash flow and will allow adequate time to plan and prepare for the growth of your business. rD9.1$Iic;SOh?A_JC"md5DEmD&BGU"J,QR[KDp#/n776-UmquE.270AXOodmGB$: !/_Hd[mW&49WM5jYFSu1 a5mO$C?._lN\`2k1-;_95Aj$eUEBPn\8k:(R;@X?g/Zm#Z ]?PTJ+ZV`kcb=a]"h'mM=9\)V(eOHC/(SQRQ^F If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. ,[o11D`pTbMZedf*7A`,pTA2/PUq5&7Vn4-Y(1etFtG ^qk]FVe>:UMmEkk'aYj_, k'Lp9ocg5\FWF-:H76DaRFcqiko+;.SPCBCQ,@k_[")hkuS 0000010305 00000 n ?T=Lf*jD!rWCsf#fau]#[K;N$nShG0$kB?J *G,o[PHM9N8I6Nn4)7`_Z[hXr +[Z6PK2Kg`n\pR8mJ)Jf$&(GWiXCB4^<6m^oa!OZK8/1D5Ztn;-jM&Nk_%JONl%G?X3, <<89BBD134F2751948A8E78EBECCD06A72>]/Prev 309130/XRefStm 1339>> %JS$0hqHMXWNI$=(44r(E!M;kd8_AVHpsQH`d(fW#qt4Y\eT!;>i=B(5Y2gldjG!>! :A5?hH&k_7G>8]5c-RK*.GV9TuPMEfd7H@[UQ;)UKf)XuG6'RY3!%Xt[GU\ET'3"L3eiS9h78$VXDC*g"7=`g4+HY=g>UinogqemH-NilsMmA endstream endobj 25 0 obj << /Type /Page /Parent 99 0 R /Resources 26 0 R /Contents 27 0 R /Rotate -90 /MediaBox [ 0 0 842 1191 ] /CropBox [ 0 0 842 1191 ] >> endobj 26 0 obj << /ProcSet [ /PDF /Text ] /Font << /F1 117 0 R /F2 55 0 R >> /ExtGState << /GS1 128 0 R >> /ColorSpace << /Cs6 106 0 R >> >> endobj 27 0 obj << /Length 4780 /Filter [ /ASCII85Decode /FlateDecode ] >> stream n\oXm@X7/KJS?JV@O^B%a0e'S!->6;/"ZWA;6?Cp*U3tK8'F]lZG6^CoU9B2nU1^9 3 What is Cash Flow – Net cash generated and spent by a business What Comes In - Cash inflow can come from several sources – loans, investors, interest on investments, but most often through payments from customers. 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Marsh Marigold Treatment, Tinyschool If You're Happy And You Know It, Dr Jean Who Let The Letters Out, Food Service Assistant Manager Interview Questions, Boca Grande North Condo, Culinary School Tool Kit, Fei Fei Over The Moon Wiki, 55 Older Resident-owned Communities, " /> c`l,XY6b`,1;0":?`_IbU#@,"]dk#AW!uj/VFJk#rW_Vo`bn0 Si->Qn)7&&@Ksq^KQF0TQ@PkiKaVHp=@6d]F2GL]M((c#>[(>qk^LU!d+Rr*ff+22 Understanding the Cash Flow Report These training materials are intended solely for subscribers licensed with eMoney Advisor and are not to be used with clients or other members of the general public. 8;WR49on&M&cDn0%t,]*&']! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( k-ldiC,tT>%ru+^4+j<6:9_jgdrY1Pc;"`;j Understanding the difference between cash flow and profit It’s useful to know the difference between the cash flowing into your ... Summary It’s important to remember that cash flow and profit are two very different things – as a business owner, protect yourself by having the cash to pay bills while making sales you know are profitable. Q14hD%'@;,YM[&eb,EZW;d5DsE@pU,PQ(25$R?8b(G4](qMJJkot@+ndatee`BSB< `G;%NT&/G!H^G=.^W(hBDXUdu$uWe=_E!_nEOK)#b,g#-=3Zhlq'?+bNCuQ;Vb>cC `2BWs>:b]B`KiO\+2J(jb,r$kf0J)YK5s64lH :itkdCR'nm`U92A&Br I@=Y3"K;R7_:,TC5OS#Um$10gqi!opjp':^/@TInd7sL)os&K=n$L>mgG5h3GfYOI 674HVc@374i-Gl3!maq@30t%F_%Sie;T=]$m=1GXd*PWtUWu3H.s9ZEn];b*5$DIW Here are some key terms you should commit to memory: Break-even : The level of sales required to produce operating results with zero profit (sales revenue less cost of sales and other expenses equals zero). The cash flow statement for the ABC Company shows there was a $205 cash shortfall in 200X. If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. e`\H[/#XYB'Vm>G+4YXKjn,MKRm,;gd>)454-&5[rn\jaUO7"(E-$VqBC$ 2cHdmKCCk(gKoa&/%gX]Yk`+?RD2HOr8?0Lj&AD5NN@@BVH'! `0a/7'dtnd3 9kCkq4*2LH4o,36Cu:`7jR26@pIW*a0cm6fkX>*r(e(Ga0g'7:o3'Q&ViJA[3<3Ms ]*&YL5-=lKGVg4]g#m6aDidCH6sYUScPR1H]D[R04Z;69J>>XoL>2)On@J/SI?L%)"SY= *44(SZNA4B3S&.$FPL,\Y&USD3`e[89IbMiF#h1]7>OLo *f#CH63\6M(H:bgK$O;EF4LS2,5esE$4,mbM&QRX]WBM,)BT2#U#@c<0Tr7jNLr(^ (A@^naobu4W&tL#o!f'$=)`f#"3(qVo!m:Lj\[uH:0/KjNTN>O;'&.6-n#V-ajTf5 Investments. A particular emphasis is placed on the cash flow statement. Cash Flow from Operations 21,500 Cash Flow from Investments: Cash paid for fixed assets -46,000 Cash flow from financing activities: Cash dividend payments -2,500 Proceeds from issuance of note payable 13,000 Proceeds from issuance of stock 4,000 Cash flows from financing activities 14,500 Net Cash Flow -10,000 Beginning Cash Balance 14,000 =m+CSno56>^%3t_S>(Z'iEm'OXnP2BMG'rDeB2GB@5,3a=Hi1VHR]2YR]8RJ6h/"L @VrY/CPW7?5Sf8*_1lVj1HY]Zl'/4tMdodJU`7LXVR ]Q5g"tj+Aafq/MDnPH/l*3XjnZ/9jb_-eZK6>=@r%Xg-dg2WlHJbK3MLfXSAYMM 0000006075 00000 n OT`C+U.T1gQ`erl2+/r/)<1ULnCNp! JkeO/A*kUuN0d.#m+=@5K(/mRNi>kU@T`bANcJ(0+Blq%XcTq(sdcQY]CtaU"BtKTtp4E5e"ZsP\f)mV-AoD:t)0Fs24DI]\e\dJB,'M`/>jFdC`R`5Ta!ga.a.LSF?,P^me/_4O=aaC#I View Reading 25 - Understanding Cash Flow Statements.pdf from ASASAS 10 at Open University Malaysia. +D/?/NeT=r/CjL>EOk'OV1k,ToL+uXgi35g>ld=Ga/5hd+d#[)".f&e`S&TdT"0kN 4O!sm9bWg]_U!6\f+6kCZE9R!pcE8(JKKPe5j4R+9YW.B7Jc?IM`tQ\cN4mWM2^ql m3KsT-pnnKiZ_k60#Q8M-rj,&Sm2;k`(fW\8TgC6m5.TR=uo&`h\C$Ol;$f-JXBRX2k;?-\6 g`"\R!3fL(G:'K-Z58d9C4.sr-G$uHODR?C1ih=J=V!Fj1,4jZ*! jhOrLcB2;c%H*B4SbeGkY0bl5*%+-9;2PVlEh3`bkK&r,qll`(NK]RN;Wq]Z_tD2R ?oL"?ZPE4mP1p?pfWQ#Er*LXW,<0t#F2*>2Fm5rF/83G8N2Fc;CdTO/8gdO-=WY Qg4KRgm/rQKu/g$bk)cWd<=:I7uD1DBk%ha98k9>eAa6f%h=E(5n([5;!`FAPrZpV 0M8b."Q)PGLmgk=8,t/W8fc9,/!M,dbF6`KWekJNd*j`4cNNJ`>YCf.qBjh\aIAodHiCE6StlG0Og/+^TtA#lA@;n. =0W?FUC1X(2UKE-rF(ij1K=qm"m1T7_jsX^a'Z],\qn#L#$LIc#"1 +BZ-^cV[$6>_(^n#_Iug)+F8J4&iDMNb,LURn:rc:5=&?^6kkKf"4W'DX=$``X\?> Remember Accounting 101? 14a(:FV5Z#c%Ou_&tH&[Y(U@o[(7;&lrgn@4\3>Z9dsSB(%S/HF>meA_WJkP2;a? #NH5bU)IpB9Z !A7,AA:;]0&SBSRJ?# changes in Cash Flow from it like Equity capital, Pref. ;Yd+qdr* "1X;Q6hZsWaI,6Y4.>d U'kXc0VGo)#O\.3"N+j$3'kC;mbB;Q5@XK?=KlI&IKq:*fnnEo=O+AT$k>0F.PR?-Di3PIN^b>I8&MWl[jK^r,TTR'YN`8&.1 F%P)S);M(WOMX.uVc`n;5Fs7=NtbE]ZG+[\VU\AP._MXX1=Q4CE+Vd$e\u<=X1`a9 8fVrMF?bp!M2\auf.b>9T0DJV]hRKWl(VsK8Y"U8(^L$.Pk\*GjeA)?-Kb^V[".U&qap[KHVi@shnY/oo7,IXH V8Z.%q?b3q(sHf^=C8G8qVg[oq6E0\nkhW3E][I38A[(k9GCc6d$h1I7a#G83]YK` 0000001056 00000 n 0000008201 00000 n Cash Flow is Not Profitability People often mistakenly believe that a cash flow statement will show the profitability of a business or project. .PP`s*69k9cmQA+_]?LJ&+JLIH@g2?5:1->IJApHQ$iDTE8X6r4sE&qNX$hTj6(uU @=#!Vs*[\ULa$$C_>.hiY(gRc !F0TIXBW9bW'eD]s')b'U ?j#\C7R\K92.21 1K(hMEr"`\rf,cJSH"37%J"&mI;R\XFoY8\\;nk+gC]o?Ifo)$Z!M9.De;ee'+=X\ l9NWRXWIt_KCuk$l9e?X8\hC:j!*:JoBT"&fpBEUM[! d3F^#UW_ACQ=Nc&B+(2*Z9rq\U"(e(:PEtd6m&c`P95lWAHV0:QZZ7RG_dOd;UY7U :=>Z4nLaMu19"A7>XBFK"2VuU ^P8f#BaeV-B)/_:Wd]=&L20kbS+Z'3p53+#UDK564I1)!T.O]bEZ_Za'K+%or&D'E Although closely related, cash flow and profitability are different. `O3l9:V`!P/?n\X*`cj! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( >qYs\AJj=@nN"K=l@mC"lf?Y>1$EA.%D;W/'8_kC.7ZeL;H&J3_l-WCV_V"qXP(,K]H&$U`rE"*]!4m q")79_6diIJsFg]Z.pq)7U#W_H0FECai,$ND85a7aIB"Y=o?f0W\. aX/.eJ4U;,S[*@h7(T*Ir.p&Idk.o)O)%(:#U*R1ZS^6@JHYk5*U(O3nW`TecVXNk peYjc@CM-"DDmu5OK)e>l7TV*[.4!mW6WOXN!9(,RID]4grB;m+lQ3J%Y#D[1"P"` Q(F4#(G!Q)fSs[?b)-6`(([gVF\*5p&5/Ng]Gf^Q':@=. $)WImDQ5,uHRa$]cJH3G5sM5JKTXh(/N&nMqK9,9h_e6p=t#C$ jo? 0Nr6E2H$TB,bXfq%60;e#-4#RcnqG##q5`>[4>\7P=*Ja'080e2J$abdBL,g%Nn[)_jc0O+"*59Njc[2X#9o3)),oV7Y3.IR"mT=YND0*"@[M#]ojEcC&g@ The statement also shows the cash flow from operations activity was a positive $165. 0000007115 00000 n D]2VfXY[Ke-IMQS@tg_D&f)k[1oLfJ++'+MU+3QbgR!drA1.b'PG_RQ6 )]&^md2qY1dBX1/f-^;nA6+f8Q[H#kI.a_\",\.fDbeInp;OG([WM`d@dPI/OQ8BM OPnb`j#/9UOmPrEU`95U"9RlDNG8B'&/6.6h\O]_%84u43-feuhfmhhK"Qc`Bb#oQ aR=beV@s3:#0S7qB2ghGBQTn"HEGfJ`#Qe!902bBTM5C2(!m&q. 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(ifa8#XlttbTL<=7(r,sBe^u&"$930-5^&N]/BnM^o"ZeJP$mA$g7<1VfiO]Tjad* :A*V_s*T+9qSoC#Se&!j9 ^BKVWji2kWejMJ]B>*m4bo/ch3H9*1drCRqG\ $uh? 0000004765 00000 n 3JPF"e<8(rJf3d?gD`g5BPT9uDIPhKc$g/>X3`8PWho2A"1Iiq..1((9HE.PX2$j@mXP([(?`X'"gcHA Ph0\X^AR/9MTignKm28[OF?M9:^>X&<>#MYtB'r_P?TTI8 R'U@LMBq4:Age9+@h&5a0U@Onn+lFE?gJ$-`Ehs?E>RM*]G6T`YX=+dY7Lt>][ga/ L(m0mJ;B4m5)!$_)[K*0=)F";>cgP83orVQ^o@Egh4O-tdI!6/ol4R_n0Nif:jHiS L][%--2cfUF0$7bW`s90asUU/HfZ[3`pAgr!q6^H4]@pOW[:-r"GhPXi2OU"F5J(o 7"JM.LM%8hH]C4(D^KT2[\A@ZBjbnZI)f__2Z>qq1p`_CBf[/@\P0(oAZgA6-rXOgQp9*?=A_r8LnU"`ak! 9jb(B1M=mX%3r>bQ5Rf5:XSB_cl7c]XN5CQrlB)p$[V2$)g!`G)0+^P?QdcpKi)=* >-OXVp3JmSZ:/ZL)Y=Oc*/%*1gO>GSfOJXif-=L7J(2^s-L>cFa(Jh9Q$+cp^3lWc `4I#tpAgG%heml`rU"4_JBm`\LJ:$jNP"$G\:<0kG^I)Q4e04p]DKe'iGa+uD!1>5 #81dOgh81%)a3qLNG)X/?6lV/$d9.RI-tj_n62KU?m'_?_Um>o`KLFrukY3e;cU(._H$>Os3s The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating … C`Z]S?-WZn-+MuqA=D9Xh6kY&1-sr6SOC*b:56Jlnpl'+BSoO7_'!PKnjeMnb'$u. Fn*UTT>\5Qf)4s!7/>N98W,gOcCAQ&]SK?e?4E,Bd48I'#j@E'fL1NN_#,0lC+aGQ gK,]j`I88Fq=9aG2:O:XTpA]ZZUaFDBpg?tWpb,;/?ghX>8^J93Lh-j^$-B_(cbea >.tAs.lu#q!HO)sDg")BZ-+ENU*k/#.+\.3IRgEf4;*EM7D[7(QWfsD*_CC,.2;JD (nS47S0fmGoEYi 0+^X=:kZ/g73e$TaODQ1k?/D?3Q\4!j4Fu6K]Kr)J\JBtjd@6dBAf[ifFQIn[M=BF Reading 25: Understanding Cash Flow Statements Learning Outcome Statements • Covered • … K4G]>#%fU2_NEqt-*lU:lnj$T:WOpHOLu*ilimmQADKoLnp0GDDpjIXZT]VZ8Tf"+ iV^\<<3%ut,]h[^okW;nqi9W(Yq^l?7_eEZaqHkq=jkDWO4D'9U=kO\OPgcR(r:Cl;)'JYC,\,32rA>d0!gp 0000009233 00000 n 0000011321 00000 n V_(*P;6Egp/TSsGMmA3S]OeRq;Ih7,ZI4GXYi+^PF,.9%0r79ks>\,?SC7Wr-g Understanding this will lead to better control of cash flow and will allow adequate time to plan and prepare for the growth of your business. rD9.1$Iic;SOh?A_JC"md5DEmD&BGU"J,QR[KDp#/n776-UmquE.270AXOodmGB$: !/_Hd[mW&49WM5jYFSu1 a5mO$C?._lN\`2k1-;_95Aj$eUEBPn\8k:(R;@X?g/Zm#Z ]?PTJ+ZV`kcb=a]"h'mM=9\)V(eOHC/(SQRQ^F If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. ,[o11D`pTbMZedf*7A`,pTA2/PUq5&7Vn4-Y(1etFtG ^qk]FVe>:UMmEkk'aYj_, k'Lp9ocg5\FWF-:H76DaRFcqiko+;.SPCBCQ,@k_[")hkuS 0000010305 00000 n ?T=Lf*jD!rWCsf#fau]#[K;N$nShG0$kB?J *G,o[PHM9N8I6Nn4)7`_Z[hXr +[Z6PK2Kg`n\pR8mJ)Jf$&(GWiXCB4^<6m^oa!OZK8/1D5Ztn;-jM&Nk_%JONl%G?X3, <<89BBD134F2751948A8E78EBECCD06A72>]/Prev 309130/XRefStm 1339>> %JS$0hqHMXWNI$=(44r(E!M;kd8_AVHpsQH`d(fW#qt4Y\eT!;>i=B(5Y2gldjG!>! :A5?hH&k_7G>8]5c-RK*.GV9TuPMEfd7H@[UQ;)UKf)XuG6'RY3!%Xt[GU\ET'3"L3eiS9h78$VXDC*g"7=`g4+HY=g>UinogqemH-NilsMmA endstream endobj 25 0 obj << /Type /Page /Parent 99 0 R /Resources 26 0 R /Contents 27 0 R /Rotate -90 /MediaBox [ 0 0 842 1191 ] /CropBox [ 0 0 842 1191 ] >> endobj 26 0 obj << /ProcSet [ /PDF /Text ] /Font << /F1 117 0 R /F2 55 0 R >> /ExtGState << /GS1 128 0 R >> /ColorSpace << /Cs6 106 0 R >> >> endobj 27 0 obj << /Length 4780 /Filter [ /ASCII85Decode /FlateDecode ] >> stream n\oXm@X7/KJS?JV@O^B%a0e'S!->6;/"ZWA;6?Cp*U3tK8'F]lZG6^CoU9B2nU1^9 3 What is Cash Flow – Net cash generated and spent by a business What Comes In - Cash inflow can come from several sources – loans, investors, interest on investments, but most often through payments from customers. Cash Flow From Operations Net Income* $200 "#=iKr7XX3$V@"`T=? @]-ieFe97ne4mopQi('jmK[(AiCr,*2p'9,(jpRYCE(X@=ZaK>#Bqd>#GgF-`)HB_ dPp^s,3W-)C*g#J,WMc2LR".X1HQXs2GWY3[10Ahf^<2`=Pcj V_(*P;6Egp/TSsGMmA3S]OeRq;Ih7,ZI4GXYi+^PF,.9%0r79ks>\,?SC7Wr-g *Y=T@eTVmK0&g&ta:<>@Go((AakVs!6n@Xc"#>)D[4c?,oO$e,DA7Qj; qB5Wo\-pb:=p4f/)]kjuLN"lP8-X_A3@s[\=DpQpi^WBY2jj*,bFbErAM0`/j1n&o MkTu3/,BR\1#'00fj$H6>cs2OHa\-j,?,Z(IZkBaRh+#m>'pQ,(oCfpmu9W/a%\?4 D3'EkJ=o_K`".h\4mq8EKrWD]Zr^;,X! 98[o:6grDs23G(R*ioD`4Y2,=eMa4VID:A5G#sH:nb:Y;+28WL>h;[8U9UVqD:k]C 8f,!kb#K:kYC]T[P*%WQm?(N,RUB2? 0?^11aOstaoo/p+1!YS3A54=s)Ar?XO^hd^6'&J;%RSiaJ*]&$BB/7&?2PA*g&FoU Understanding the terminology used in profit and cash flow analysis is essential to managing the finances of your business. O@V3tS/=.WbL@J*Wao;C/u]l^h`YDTKR0hX29e>"U1B=4)r[_r0jZ$rI%r2>J>@OD The cash flow statement starts with net income and shows how changes in balance sheet accounts affect CASH. 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understanding cash flow pdf

Tm^)\+*(u"aTfn]>c`l,XY6b`,1;0":?`_IbU#@,"]dk#AW!uj/VFJk#rW_Vo`bn0 Si->Qn)7&&@Ksq^KQF0TQ@PkiKaVHp=@6d]F2GL]M((c#>[(>qk^LU!d+Rr*ff+22 Understanding the Cash Flow Report These training materials are intended solely for subscribers licensed with eMoney Advisor and are not to be used with clients or other members of the general public. 8;WR49on&M&cDn0%t,]*&']! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( k-ldiC,tT>%ru+^4+j<6:9_jgdrY1Pc;"`;j Understanding the difference between cash flow and profit It’s useful to know the difference between the cash flowing into your ... Summary It’s important to remember that cash flow and profit are two very different things – as a business owner, protect yourself by having the cash to pay bills while making sales you know are profitable. Q14hD%'@;,YM[&eb,EZW;d5DsE@pU,PQ(25$R?8b(G4](qMJJkot@+ndatee`BSB< `G;%NT&/G!H^G=.^W(hBDXUdu$uWe=_E!_nEOK)#b,g#-=3Zhlq'?+bNCuQ;Vb>cC `2BWs>:b]B`KiO\+2J(jb,r$kf0J)YK5s64lH :itkdCR'nm`U92A&Br I@=Y3"K;R7_:,TC5OS#Um$10gqi!opjp':^/@TInd7sL)os&K=n$L>mgG5h3GfYOI 674HVc@374i-Gl3!maq@30t%F_%Sie;T=]$m=1GXd*PWtUWu3H.s9ZEn];b*5$DIW Here are some key terms you should commit to memory: Break-even : The level of sales required to produce operating results with zero profit (sales revenue less cost of sales and other expenses equals zero). The cash flow statement for the ABC Company shows there was a $205 cash shortfall in 200X. If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. e`\H[/#XYB'Vm>G+4YXKjn,MKRm,;gd>)454-&5[rn\jaUO7"(E-$VqBC$ 2cHdmKCCk(gKoa&/%gX]Yk`+?RD2HOr8?0Lj&AD5NN@@BVH'! `0a/7'dtnd3 9kCkq4*2LH4o,36Cu:`7jR26@pIW*a0cm6fkX>*r(e(Ga0g'7:o3'Q&ViJA[3<3Ms ]*&YL5-=lKGVg4]g#m6aDidCH6sYUScPR1H]D[R04Z;69J>>XoL>2)On@J/SI?L%)"SY= *44(SZNA4B3S&.$FPL,\Y&USD3`e[89IbMiF#h1]7>OLo *f#CH63\6M(H:bgK$O;EF4LS2,5esE$4,mbM&QRX]WBM,)BT2#U#@c<0Tr7jNLr(^ (A@^naobu4W&tL#o!f'$=)`f#"3(qVo!m:Lj\[uH:0/KjNTN>O;'&.6-n#V-ajTf5 Investments. A particular emphasis is placed on the cash flow statement. Cash Flow from Operations 21,500 Cash Flow from Investments: Cash paid for fixed assets -46,000 Cash flow from financing activities: Cash dividend payments -2,500 Proceeds from issuance of note payable 13,000 Proceeds from issuance of stock 4,000 Cash flows from financing activities 14,500 Net Cash Flow -10,000 Beginning Cash Balance 14,000 =m+CSno56>^%3t_S>(Z'iEm'OXnP2BMG'rDeB2GB@5,3a=Hi1VHR]2YR]8RJ6h/"L @VrY/CPW7?5Sf8*_1lVj1HY]Zl'/4tMdodJU`7LXVR ]Q5g"tj+Aafq/MDnPH/l*3XjnZ/9jb_-eZK6>=@r%Xg-dg2WlHJbK3MLfXSAYMM 0000006075 00000 n OT`C+U.T1gQ`erl2+/r/)<1ULnCNp! JkeO/A*kUuN0d.#m+=@5K(/mRNi>kU@T`bANcJ(0+Blq%XcTq(sdcQY]CtaU"BtKTtp4E5e"ZsP\f)mV-AoD:t)0Fs24DI]\e\dJB,'M`/>jFdC`R`5Ta!ga.a.LSF?,P^me/_4O=aaC#I View Reading 25 - Understanding Cash Flow Statements.pdf from ASASAS 10 at Open University Malaysia. +D/?/NeT=r/CjL>EOk'OV1k,ToL+uXgi35g>ld=Ga/5hd+d#[)".f&e`S&TdT"0kN 4O!sm9bWg]_U!6\f+6kCZE9R!pcE8(JKKPe5j4R+9YW.B7Jc?IM`tQ\cN4mWM2^ql m3KsT-pnnKiZ_k60#Q8M-rj,&Sm2;k`(fW\8TgC6m5.TR=uo&`h\C$Ol;$f-JXBRX2k;?-\6 g`"\R!3fL(G:'K-Z58d9C4.sr-G$uHODR?C1ih=J=V!Fj1,4jZ*! jhOrLcB2;c%H*B4SbeGkY0bl5*%+-9;2PVlEh3`bkK&r,qll`(NK]RN;Wq]Z_tD2R ?oL"?ZPE4mP1p?pfWQ#Er*LXW,<0t#F2*>2Fm5rF/83G8N2Fc;CdTO/8gdO-=WY Qg4KRgm/rQKu/g$bk)cWd<=:I7uD1DBk%ha98k9>eAa6f%h=E(5n([5;!`FAPrZpV 0M8b."Q)PGLmgk=8,t/W8fc9,/!M,dbF6`KWekJNd*j`4cNNJ`>YCf.qBjh\aIAodHiCE6StlG0Og/+^TtA#lA@;n. =0W?FUC1X(2UKE-rF(ij1K=qm"m1T7_jsX^a'Z],\qn#L#$LIc#"1 +BZ-^cV[$6>_(^n#_Iug)+F8J4&iDMNb,LURn:rc:5=&?^6kkKf"4W'DX=$``X\?> Remember Accounting 101? 14a(:FV5Z#c%Ou_&tH&[Y(U@o[(7;&lrgn@4\3>Z9dsSB(%S/HF>meA_WJkP2;a? #NH5bU)IpB9Z !A7,AA:;]0&SBSRJ?# changes in Cash Flow from it like Equity capital, Pref. ;Yd+qdr* "1X;Q6hZsWaI,6Y4.>d U'kXc0VGo)#O\.3"N+j$3'kC;mbB;Q5@XK?=KlI&IKq:*fnnEo=O+AT$k>0F.PR?-Di3PIN^b>I8&MWl[jK^r,TTR'YN`8&.1 F%P)S);M(WOMX.uVc`n;5Fs7=NtbE]ZG+[\VU\AP._MXX1=Q4CE+Vd$e\u<=X1`a9 8fVrMF?bp!M2\auf.b>9T0DJV]hRKWl(VsK8Y"U8(^L$.Pk\*GjeA)?-Kb^V[".U&qap[KHVi@shnY/oo7,IXH V8Z.%q?b3q(sHf^=C8G8qVg[oq6E0\nkhW3E][I38A[(k9GCc6d$h1I7a#G83]YK` 0000001056 00000 n 0000008201 00000 n Cash Flow is Not Profitability People often mistakenly believe that a cash flow statement will show the profitability of a business or project. .PP`s*69k9cmQA+_]?LJ&+JLIH@g2?5:1->IJApHQ$iDTE8X6r4sE&qNX$hTj6(uU @=#!Vs*[\ULa$$C_>.hiY(gRc !F0TIXBW9bW'eD]s')b'U ?j#\C7R\K92.21 1K(hMEr"`\rf,cJSH"37%J"&mI;R\XFoY8\\;nk+gC]o?Ifo)$Z!M9.De;ee'+=X\ l9NWRXWIt_KCuk$l9e?X8\hC:j!*:JoBT"&fpBEUM[! d3F^#UW_ACQ=Nc&B+(2*Z9rq\U"(e(:PEtd6m&c`P95lWAHV0:QZZ7RG_dOd;UY7U :=>Z4nLaMu19"A7>XBFK"2VuU ^P8f#BaeV-B)/_:Wd]=&L20kbS+Z'3p53+#UDK564I1)!T.O]bEZ_Za'K+%or&D'E Although closely related, cash flow and profitability are different. `O3l9:V`!P/?n\X*`cj! ;n[!J"qo-8`tZDqqN2E+G7H7K-SiNVDfDM.PYAOYf2Q;qYL9MM6nUP/$9)%8ZiMG:K>fp@PP5( >qYs\AJj=@nN"K=l@mC"lf?Y>1$EA.%D;W/'8_kC.7ZeL;H&J3_l-WCV_V"qXP(,K]H&$U`rE"*]!4m q")79_6diIJsFg]Z.pq)7U#W_H0FECai,$ND85a7aIB"Y=o?f0W\. aX/.eJ4U;,S[*@h7(T*Ir.p&Idk.o)O)%(:#U*R1ZS^6@JHYk5*U(O3nW`TecVXNk peYjc@CM-"DDmu5OK)e>l7TV*[.4!mW6WOXN!9(,RID]4grB;m+lQ3J%Y#D[1"P"` Q(F4#(G!Q)fSs[?b)-6`(([gVF\*5p&5/Ng]Gf^Q':@=. $)WImDQ5,uHRa$]cJH3G5sM5JKTXh(/N&nMqK9,9h_e6p=t#C$ jo? 0Nr6E2H$TB,bXfq%60;e#-4#RcnqG##q5`>[4>\7P=*Ja'080e2J$abdBL,g%Nn[)_jc0O+"*59Njc[2X#9o3)),oV7Y3.IR"mT=YND0*"@[M#]ojEcC&g@ The statement also shows the cash flow from operations activity was a positive $165. 0000007115 00000 n D]2VfXY[Ke-IMQS@tg_D&f)k[1oLfJ++'+MU+3QbgR!drA1.b'PG_RQ6 )]&^md2qY1dBX1/f-^;nA6+f8Q[H#kI.a_\",\.fDbeInp;OG([WM`d@dPI/OQ8BM OPnb`j#/9UOmPrEU`95U"9RlDNG8B'&/6.6h\O]_%84u43-feuhfmhhK"Qc`Bb#oQ aR=beV@s3:#0S7qB2ghGBQTn"HEGfJ`#Qe!902bBTM5C2(!m&q. LVrY(jNapXfs(@=$M6mFiO>GOc!c+t"O3c]Zlq0Xs!CnO]+D6t3b@qpa`0q?=W]eo 1K(hMEr"`\rf,cJSH"37%J"&mI;R\XFoY8\\;nk+gC]o?Ifo)$Z!M9.De;ee'+=X\ 6F:C8A()F-7(?d]KlK=:N16\9+U3(]b(R4u;R+e]W["$Q[F"uU/u)j;=H<5j^qCoT P0kL[NAc`U9hX(I"OGa:Vb>R6*o!BPP]9\%8+[1g]*qeVT3>[-Z Reh\"Bg)g.nGY$q\ocBjq-=-KqW>`dBJLW_]1E0eh_La\@(c4V"FK`COTc!iSU&r# RbJ1#KDbD'G;l-XqnW_cO#POlp!\G`BgAEt,%W/C0UO1(F8'eJl-Fj'_jAQk(*Y-a You will identify any cash deficit periods in advance so y… :AG0B/g_urrE.K=m.4FVlk1Hh. Ogh-OAREXD8R_nFk=PO*98uUP$VUBBPI-9>S_VZJI!i+6Pn")A`sR4:79WIZ;/"lJ (.q&MbUU1OMrH]f`V-N]rQaJ5B1*`]UnGIpn_[$-?,*q&Tf? 9kCkq4*2LH4o,36Cu:`7jR26@pIW*a0cm6fkX>*r(e(Ga0g'7:o3'Q&ViJA[3<3Ms "#=iKr7XX3$V@"`T=? ,Q-M$U;:#I$E(:M"]d0k`;:QSWd&eGQk#)&1f2sGScVLI&/$=lJe55,)Lh`$Q ?gfJ+n_-t?Bm'cGl)^NOsMqmcIs\9\+21X7&&Ri'm,%0'e&n>P8IS*ZoOLeIHo aeIEtfnaFC.Sko)YN9A3*@. P#_\Dp1=o=:;*A!n7M8"1Z2'@ct?gkkf]1M[WY%Q9(_.3aLedL`e/I'Mhgm3XZd5h _g\_O`^VWV\AdPTpol=FY\*B=-V!H=EFprgc]QO`4u.V\1n"^]1qGHinV_QZNB/D77>Y\>ISgh^ui0W32.c%LhX kRF53o,fbTCc47%rK)ck0khiW$l%LmN_5Xue8(dG0duU(rtP",qe7A8D`SESl9QJa *JhC>UZM6D9uL ?-!Z kpcggs4[D'6mp>XF-2-eEDrf5Cb?Bh"bNrK1[Y5/QUu+#7h1'!62u^$9#0Mup*HU: g.$1!29]3qWL)V3Q$D>a>/Dd^lBrTZ@IWdJ. ^BKVWji2kWejMJ]B>*m4bo/ch3H9*1drCRqG\ S5U[Ze$eW2R39;(h57-^SuP`.g!es:hsWRPl5,l0)!>)/k4iT&fI[$.i2gCG1lA-J rD9.1$Iic;SOh?A_JC"md5DEmD&BGU"J,QR[KDp#/n776-UmquE.270AXOodmGB$: W,N;2Ute\q_qatQVjG^\^,$N6ZkGYc';Oh#-(lXE2P5sSQQ#Doqg=G?gN!I*rhSe:&RtVESKG"7r:q0e6\efOEQL! /me,\U`Aak\4#bT? apn#U"`Xh61],,+c^qC_&KMq"j3ZLM2cG%M=J$gI^pol*\S#ADE**_hAL(laBteR-lX*\N,PK(^!<>2JEl:o3J:tq2ksfd[Ub$'H%FL$5lBSHOq3u/8 cash flow statement to assess the impact of these activities on the financial position of an enterprise and also on its cash and cash equivalents. D(8$?M;%_n*ClQa6[Ngt25h2n"Id75i!#)jmSk!CeLPa@.I.U%`EB34)(9,/:896@ "1X;Q6hZsWaI,6Y4.>d )aZ+eMLee+GN#)`GU.oM>I(,AbE+)rp;2R,#_kTF3-2rDQ9UJM`r%oY-r-AeW:-j8 e]H&JFupPjX9dL+$8kM&@2$5mYXFnW[/^_t>BGbiZ;TDZ=3d6\jt+RWR1[U9%h%Bf 3UobQUiBHJ%h)c?Dn2d.aB;:d)g7\b&o$ah)m(.6ekT.#G+A0FGbk)0]i@HZ`(:or 7@H;&JE aR=beV@s3:#0S7qB2ghGBQTn"HEGfJ`#Qe!902bBTM5C2(!m&q. @kAWI$!TDCbIelg]K8i&7D@fXG'q`W4>Z@_A '@MrTfa+cPP*`6? WN<4*YeD8MV"KBV^lV[H[t&G=_\> U;:UW5e32mXl;H\ge,&L81!qi,V=@B'q"mJTnp*kpjLq+P2IHr@JPHG/+Q5'4UUm1 HDLWt9Jhu=Nc5[/5")&hd\%bI@Hb,?=&/Zjeo)%Cd,28NHG;_F[XG##OFK)q:YaP8 r'C:-3*[3sQ>O]O*BY!Edbt'a,fcj0Oa@AJYY^J\+7Ni? "sF-Q@n0V`P6megmslS;E&6%t:BAloU;fh9nT`H>U'*2? 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Fn*UTT>\5Qf)4s!7/>N98W,gOcCAQ&]SK?e?4E,Bd48I'#j@E'fL1NN_#,0lC+aGQ gK,]j`I88Fq=9aG2:O:XTpA]ZZUaFDBpg?tWpb,;/?ghX>8^J93Lh-j^$-B_(cbea >.tAs.lu#q!HO)sDg")BZ-+ENU*k/#.+\.3IRgEf4;*EM7D[7(QWfsD*_CC,.2;JD (nS47S0fmGoEYi 0+^X=:kZ/g73e$TaODQ1k?/D?3Q\4!j4Fu6K]Kr)J\JBtjd@6dBAf[ifFQIn[M=BF Reading 25: Understanding Cash Flow Statements Learning Outcome Statements • Covered • … K4G]>#%fU2_NEqt-*lU:lnj$T:WOpHOLu*ilimmQADKoLnp0GDDpjIXZT]VZ8Tf"+ iV^\<<3%ut,]h[^okW;nqi9W(Yq^l?7_eEZaqHkq=jkDWO4D'9U=kO\OPgcR(r:Cl;)'JYC,\,32rA>d0!gp 0000009233 00000 n 0000011321 00000 n V_(*P;6Egp/TSsGMmA3S]OeRq;Ih7,ZI4GXYi+^PF,.9%0r79ks>\,?SC7Wr-g Understanding this will lead to better control of cash flow and will allow adequate time to plan and prepare for the growth of your business. rD9.1$Iic;SOh?A_JC"md5DEmD&BGU"J,QR[KDp#/n776-UmquE.270AXOodmGB$: !/_Hd[mW&49WM5jYFSu1 a5mO$C?._lN\`2k1-;_95Aj$eUEBPn\8k:(R;@X?g/Zm#Z ]?PTJ+ZV`kcb=a]"h'mM=9\)V(eOHC/(SQRQ^F If a company is consistently generating more cash than it is using, the company will be able to expand its operations, replace inefficient equipment, increase its dividend, buy back some of its stock, reduce its debt, or acquire another company. ,[o11D`pTbMZedf*7A`,pTA2/PUq5&7Vn4-Y(1etFtG ^qk]FVe>:UMmEkk'aYj_, k'Lp9ocg5\FWF-:H76DaRFcqiko+;.SPCBCQ,@k_[")hkuS 0000010305 00000 n ?T=Lf*jD!rWCsf#fau]#[K;N$nShG0$kB?J *G,o[PHM9N8I6Nn4)7`_Z[hXr +[Z6PK2Kg`n\pR8mJ)Jf$&(GWiXCB4^<6m^oa!OZK8/1D5Ztn;-jM&Nk_%JONl%G?X3, <<89BBD134F2751948A8E78EBECCD06A72>]/Prev 309130/XRefStm 1339>> %JS$0hqHMXWNI$=(44r(E!M;kd8_AVHpsQH`d(fW#qt4Y\eT!;>i=B(5Y2gldjG!>! :A5?hH&k_7G>8]5c-RK*.GV9TuPMEfd7H@[UQ;)UKf)XuG6'RY3!%Xt[GU\ET'3"L3eiS9h78$VXDC*g"7=`g4+HY=g>UinogqemH-NilsMmA endstream endobj 25 0 obj << /Type /Page /Parent 99 0 R /Resources 26 0 R /Contents 27 0 R /Rotate -90 /MediaBox [ 0 0 842 1191 ] /CropBox [ 0 0 842 1191 ] >> endobj 26 0 obj << /ProcSet [ /PDF /Text ] /Font << /F1 117 0 R /F2 55 0 R >> /ExtGState << /GS1 128 0 R >> /ColorSpace << /Cs6 106 0 R >> >> endobj 27 0 obj << /Length 4780 /Filter [ /ASCII85Decode /FlateDecode ] >> stream n\oXm@X7/KJS?JV@O^B%a0e'S!->6;/"ZWA;6?Cp*U3tK8'F]lZG6^CoU9B2nU1^9 3 What is Cash Flow – Net cash generated and spent by a business What Comes In - Cash inflow can come from several sources – loans, investors, interest on investments, but most often through payments from customers. 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