This website uses cookies to ensure you have the best experience. Learn more

Income Statement Vs Cashflow Statement Essay

428 words - 2 pages

Question #6

A. Briefly state how the Income Statement is different from the Cash Flow Statement. Give examples of decisions that can be made from the information provided by each of these statements?

-The income statement shows how much revenue a company has earned over a period of time, which is usually for a year. The income statement also reports the costs and expenses associated with earning the revenue. At the bottom of the income statement it shows the net inome, which shows the actual earnings after expenses, taxes, etc are taken out. This can be a net profit or net loss, depending on how the company performed that year. ...view middle of the document...

-A manager can use the income statement to analyze how much revenue is being lost due to expenses. Expenses are necessary in every business, but there are ways to manage them to save money. It also allows management and investors to decide if the company wants to expand into different markets or create new products. If they see sales are consistently increasing year over year, then it may be a good time to see if it would be beneficial to expand.

-A manager can use the statement of cash flows to provide information about the ability to pay debt owed. The survival of every organization depends on its ability to generate and acquire cash. Companies survive because they have cash, they fail when they don’t. We must therefore be interested in a company’s ability to generate cash for itself, and to acquire it from other sources. If a company is lacking cash flow, management can find ways to increase cash inflows. This could be by selling assets, borrowing money from banks, etc.

Give examples of the types of Cash Flows we see classified as:
Operating Activities, Investing Activities, and Financing Activities.

Operating Activities: Cash received from the sales of goods or services (cash inflow), the purchase of inventory (cash outflow)

Investing Activities: Sale of fixed assets (cash inflow), Capital expenditures and acquisitions (cash outflow)

Financing Activities: Issuance of stocks and bonds (cash inflow), repurchase of stocks and bonds (cash outflow)

Other assignments on Income Statement Vs Cashflow Statement

Liabilities Essay

284 words - 2 pages rental company's) implied rate The lessee incremental borrowing rate Going forward, the leased asset is depreciated in a manner consistent with the lessee's usual policy for depreciating its operational assets. It can be over the term of the lease (most common) or over the asset's useful life, if ownership transfers or a bargain purchase option is present. • Income statement - A capital-lease payment includes two components: one is the

Final Paper For Accounting 205

2226 words - 9 pages , Walmart employs 2.2 million associates worldwide. Horizontal Analysis of Income Statement and Balance Sheet Fiscal year ends in January. USD in millions except per share data. | 2011-01 | 2012-01 | 2013-01 | 2014-01 | TTM | Revenue | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | Cost of revenue | 74.74% | 74.98% | 75.13% | 75.18% | 75.21% | Gross profit | 25.26% | 25.02% | 24.87% | 24.82% | 24.79% | Operating expenses

Financial Statements

326 words - 2 pages Katrina Baron Financial Statements The four basic financial statements are the balance sheet, income statement, statement of cash flow, and the statement of retained earnings. The balance sheet depicts the current financial circumstances of the company. This reports the company’s assets, liabilities, and net equity as of a given point in time. The income statement reports the company’s cost and revenues. This reports the company’s income

Powerpoint Chapter 1

1207 words - 5 pages )
 •  No
authority
to
require
compliance.
 •  But,
required
by
European
Union
(EU)
 for
listed
companies.
 •  Similar
to
US
GAAP
in
many
ways.
 •  Convergence
project
with
FASB.
 1-27 Financial
Statements
Required
 by
GAAP
 •  Statement
of
Financial
Posi3on
(Balance
 Sheet).
 •  Income
Statement.
 •  Statement
of
Cash
Flows.
 1-28 Status
vs.
Flow
 •  Status
Report:

Resources
and
 obliga3ons
at
a
point
in
3me:
 – Balance
sheet

Application Of Financial Statement

804 words - 4 pages Assignment 1: Application of Financial Statement Students will prepare a ten (10) page response to the following: * Select either the balance sheet , income statement,or statement of cash flow and explain how the use of it may be applied to your everyday life. * Using the same concept selected above, discuss how a business manager may benefit from an understanding of this statement. * Discuss how your understanding of the balance sheet

Accounting Notes

1969 words - 8 pages has (assets) and owes (liabilities) at one point in time (e.g., at 12/31/15 shows what we have AS OF that specific date) * Income Statement – shows how profitable a company was throughout an entire period (e.g., for the period ended 12/31/15 shows what we did throughout the entire year 1/1/15-12/31/15. * Retained Earnings Statement – cash distributed to owners vs. kept in the business to grow * Statement of Cash

Wendy Accounting

2551 words - 11 pages DHT-FT-2012-04-1 Ms.Zwen Chua Accounting in H&T Continuous Assessment 3 (Group Work) Team members: Vu Que Linh (1206009805) Andrian Hendro (1207009990) Giovanni Budianto (1110009123) Vania (1206009788) Pham Thuy Van (1204009616) Pham Thi Hoan Hao (1207009935) Maria Astrid K (1206009804) Huynh Ngoc Thanh Truc Table of Contents Introduction…………………………………………………………….1 Presentation of financial statement of the past three

Heidelberg Cement Bangladesh

4966 words - 20 pages capital of the business is rising and that the business is growing. The rate of increase in the shareholders equity is very impressive almost doubling in the last five years. This would encourage further investment in the future. Also new investors would be encouraged to invest in the company and therefore increases the shareholders welfare. CASHFLOW STATEMENT EVALUATION From the cash flow statements the shareholders can evaluate how much

New Heritage Doll

562 words - 3 pages 12-11-30 Fi nance S i ul i C apialB udgetng m aton: t i Finance Simulation: Capital Budgeting prepare dashboard I/S and B/S cashflow statement analyze financial analysis project details decide historical financials project updates 2013 'Design Your Own Doll' : Project costs in the first year were as budgeted but were not sufficient to get the assembly equipment and related software working properly. Additional outlays are required to

Financial Statements

1092 words - 5 pages company and the information needed, would be to look at the financial statements. By looking at the income statement, balance sheet, and the statement of cash flow, the financial health of the company can be discovered. A shareholder or potential investor will certainly want to see if the company that they are investing in is going to give them a return on their investment. To get a clear picture of whether or not this concept is a

Hello Tomato

1296 words - 6 pages information and results of operations for the past fiscal year. The annual report includes financial statements, notes to financial statements, management's discussion and analysis of financial condition, and the auditor's report. * Financial Statements: Financial statements include four interrelated documents that present financial information about a company. They include the income statement, statement of equity (sole proprietorship &amp

Similar Documents

Preparing An Income Statement Essay

263 words - 2 pages Preparing an Income Statement In constructing this muli-step income statement there was only one year available of information so it was hard to compare it to a previous year and see it the numbers have decreased or increased. The information presented on an income statement are not complete and sufficient barometers of financial performance. The income statement is one of many pieces of a financial statement package, and like the other

Post Fir Income Statement Essay

334 words - 2 pages 1-32B (Learning Objective 5: Identify financial statement by type of information) Assume Neil, Inc., is expanding into Germany. The company must decide where to locate and how to finance the expansion. Identify the financial statement where these decision makers can find the following information about Neil, Inc. In some cases, more than one statement will report the needed data. a. Income tax expense P1-66B ▸Requirements 1. Prepare

Cryptography And Politics Essay

418 words - 2 pages NI = Net Income NOPAT = Net Operating Profit after Tax FCFF = Free Cashflow to Firm ΔWCR = Working Capital Requirement PPE=Fixed Assets (?) (PPE= Property Plant and Equipment) Investment-> Fixed Assets AT = Asset Turnover TA = Total Assets S = Sales A = Assets E=Equity FCFF=NOPAT+DA+ΔWCR-Investment WCR = AR+Investment-AP Watch out! ΔWCR = -ΔWCR(math) ROA = Return on Assets WACC = Weighted average Cost of Capital CAPEX

Puppy Essay

353 words - 2 pages STUDY GUIDE EXAM 1: (25 multiple choice questions worth 3 points each and 3 problems worth 45 points) 3 problems may cover following topics: journal entries, adjusting journal entries, closing entries, preparation of financial statements, multiple step income statement. Chapter 1: Purpose (objective) of financial accounting; cash vs accrual accounting (net operating cash flow vs. net income); history of standard setting – SEC, AICPA