Join Jim Stice for an in-depth discussion in this video Practice categorizing cash flows, part of Running a Profitable Business: Understanding Cash Flow.
- Let's use an example to practice…identifying some operating investing…and financing cash flows.…The following information is for Lorian company.…We'll consider these items one by one.…Number one, cash sales for the year were $50,000.…This is an operating activity.…Hopefully, this is a routine thing…that we are doing everyday.…Collecting cash from our customers.…Number two, sales on credit totaled $60,000.…This is in the context of the cash flow statement, nothing.…
There is no cash flow here.…Now this sale is certainly good news.…We have delivered economic value to our customer,…and our customer will pay us in the future,…but the statement of cash flows…contains only actual cash flows,…not expected cash flows,…so there is no cash flow here,…and this item would not be shown…in the statement of cash flows.…Number three, cash collections…of accounts receivable were $38,000.…Here is the cash flow,…and it's operating cash flow.…We report cash collections from customers…when we actually receive the cash.…
You can see that the idea behind…
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
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