Items Affect Company’s Cash Flow
We will use our store, Organic Food Everyday, to further illustrate some key items in the Cash Flow Statement. You will learn:
- Why must we adjust some cash/non-cash items in Cash Flow from Operations?
- Why do some cash inflows and outflows appear in the Cash Flow Statement, but not in the Income Statement?
Capital Expenditures and Depreciation
You will learn how we record Capital Expenditures
in Cash Flows from Investing Activities on the Cash Flow Statement, and then allocate its cost over time as Depreciation
in the Income Statement.
You will learn how to recognise cash invested in quoted shares in Cash Flows from Investing Activities, and record the investment in Balance Sheet as Short-Term Investment.
Learn the impacts to financial statements when a company raises debt.
Dividends are cash payments to equity investors. Paying dividends will reduce Equity and Cash Balance in the Balance Sheet. Learn how to record dividend in financial statements.
In a share buyback, the company buys back your shares so that you no longer own a percentage of the company. Learn how share buyback impacts financial statements.
Impairment of Assets
Impairment of assets is a complicated topic. This article explains impairment of assets in layman terms and the impacts to financial statements.