Funds Flow

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What are the financial decision areas?

-Investment-what did we invest in?

-Operations-income statement

-Financing-funds flow statement-statement of sources and uses
Investments are related to funds how?

Investments use funds
Disinvestments are related to funds how?

Disinvestments are fund sources
New financing does what to funds?

New financing increases funds-sources
Repayment does what to funds

Repayment uses funds
What are the sources of funds?
- Dec. Assets
- Inc. Liab
- Inc. Stockholder's Eq
- Depreciation
- Net Income
Uses of funds include?
- Inc. Assets
- Dec. Liab
- Dec. Stockholder's Eq
- Cash Dividends
- Net Loss
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
New financing does what to funds?
So if capital account is the owner providing new financing this does what also?

Increases funds
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
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
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
Why is depreciation a source of funds?

On our operating statement we write our Net Profit minus our depreciation
Why is net income a source of funds?

Net Profit

Author

kaylaelko

75503

Card Set

Funds Flow

Description

funds flow

Updated

2011-03-27T21:31:17Z

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