Join Jim Stice for an in-depth discussion in this video Managing investing cash flow, part of Running a Profitable Business: Understanding Cash Flow.
- Capital expenditures are purchases of long-term…operating assets, such as land, buildings, and equipment.…These assets are acquired to be used…over the course of several years.…In the statement of cash flows, we classify the purchase…of these assets as investing activiities.…The value of long-term operating assets stems from the fact…that they help companies generate future cash flows.…Capital budgeting is the name given to…the process whereby decisions are made…about acquiring long-term operating assets.…There are several financial models used…to make capital budgeting decisions.…
A simple one is called payback period,…and involves computing how many years…it will take to recover the initial investment cost.…Net Present Value, or NPV analysis,…involves comparing the cost of the asset…with the value of the expected cash inflows…after adjusting for the time value of money.…The value of a long-term operating asset…can disappear instantly if events lower expectations…about the future cash flows the asset can generate.…
Want to hear more from Jim and Kay? Learn about all three types of accounting—financial, managerial, and income tax—in their Accounting Fundamentals course.
- Differentiating between net income and operating cash flow
- Categorizing cash flow
- Using financial data to deduce cash flow
- Managing operating, investing, and financing cash flows
- Typical cash flow patterns
- Converting net income into operating cash flow
- Improving operating cash flow
Skill Level Intermediate
1. The Importance of Cash Flow Analysis
2. Overview of the Statement of Cash Flows
3. Using Cash Flow Data to Make a Loan Decision
4. Converting Income Statement Data into Operating Cash Flow Data
5. Managing Cash Flow
6. Cash Flow Numbers for Some Real Companies
The danger of free cash flow3m 56s
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.Cancel
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.