Join Jim Stice for an in-depth discussion in this video Using balance sheet and income statement data to deduce cash flows, part of Running a Profitable Business: Understanding Cash Flow.
- It is easy to construct the statement…of cash flows if you have access…to the detail cash flow data.…Just three easy steps, identity the cash flows,…categorize each cash flows as operating, investing…and financing and then make the report. That's easy.…But what if you don't have the detail cash flow data,…item by item. What if you only have the balance sheet…and the income statement, which is a very common situation…for a small company? What do you do then?…Well, good news. We can use balance sheet…and income statement data to deduce the cash flows.…
Yes, we are detectives here, ladies and gentlemen.…So I have a friend who has been a loan officer…at a bank for many years.…He tells me that the first thing he has his staff do…when a small or medium size business comes in…for a loan, is to use the company's balance sheet…and income statement to create a statement of cash flows.…Let's learn how to do this.…This skill is useful in it of itself…but this is also a useful exercise in that we learn…how all three financial statements relate to one another.…
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.
Lynda.com is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.
- 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 Appropriate for all
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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