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:

1. Why must we adjust some cash/non-cash items in Cash Flow from Operations?
2. 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.

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Short-Term Investments

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.

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Selling Assets or Investments

What happens to our financial statements if we sell all quoted shares?

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Raising Debt

Learn the impacts to financial statements when a company raises debt.

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Raising Equity / Capital

Learn the impact to financial statements when a company raises equity / capital.

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Dividends

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.

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Share Buyback

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.

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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.

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