B Types of cashflow
Date: 2015-10-07; view: 455.
A Cash inflows and outflows
Cashflow statement
Obtain the annual report of an organization you are interested in. Relate where possible the items on the liabilities side of its balance sheet with the items in the table above.
Over to you
The cashflow statement shows money actually ñîming into and going out of a company in a particular period: cash inflows and outflows.
Net cashflow from operations is the money generated by the sales of the company's goods or serv³ces, minus the money spent on supplies. staff salaries, etc. in the period Net cashflow from investment activities is the result of:
- purchases of securities (bonds, shares, etc.) in other companies.
- money received from sales of securities in other companies.
- loans made to borrowårs.
- loans repaid and loan interest paid by borrowers.
- purchases of land, buildings and equipment.
- sales of land, buildings and equipment.
Net cashflow from financing activities is the result of:
- money received through short-terms borrowing.
- money repaid in short-term borrowing.
- money received through issuing new shares in the company.
- money received through issuing new bonds in the company.
- dividends paid to shareholders.
Add³ng and subtracting the figures above, the company calculates its net cash position at the end of the year. Investors check the cashflow statement to see how the company is obtaining and using its cash - how much it made from its operations, how much it has raised through new share issues, etc.
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