Funds Flow

  1. What are the financial decision areas?
    -Investment-what did we invest in?

    -Operations-income statement

    -Financing-funds flow statement-statement of sources and uses
  2. Investments are related to funds how?
    Investments use funds
  3. Disinvestments are related to funds how?
    Disinvestments are fund sources
  4. New financing does what to funds?
    New financing increases funds-sources
  5. Repayment does what to funds
    Repayment uses funds
  6. What are the sources of funds?
    • Dec. Assets
    • Inc. Liab
    • Inc. Stockholder's Eq
    • Depreciation
    • Net Income
  7. Uses of funds include?
    • Inc. Assets
    • Dec. Liab
    • Dec. Stockholder's Eq
    • Cash Dividends
    • Net Loss
  8. How would you disinvest in something?
    • Sell my inventory
    • When you sell inventory you disinvest in it
    • When you disinvest you're hoping you sell it for more than you paid
  9. New financing does what to funds?
    So if capital account is the owner providing new financing this does what also?
    Increases funds
  10. Example of a decrease in assets? what would we look at as a source?
    A decrease in inventory, when we decrease inventory then dollars are coming in
  11. Increasing liabilities involves what?
    can be an Account Payable like increasing a note payable

    When we increase a current liability no money coming in but inventory is

    increase current liability by getting inventory on credit

    Why is account payable important? we bought inventory and didn't pay for it now we sell the inventory and we sell it for more than we paid for it
  12. Increasing stockholder's equity involves?
    • We put our own money into the company
    • We increase Owner's Equity and Net Worth
    • We put money into our company
  13. Why is depreciation a source of funds?
    On our operating statement we write our Net Profit minus our depreciation
  14. Why is net income a source of funds?
    Net Profit
Card Set
Funds Flow
funds flow