Understanding the Statement of Cash Flows (3 hrs)

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Course Description

Understanding the Statement of Cash Flows

Cash flow is one of the most important long-term indicators for the overall financial health of a business. For a business to enjoy long-term success, sufficient cash must always be on-hand to accomplish various things including paying worker salaries, resolving immediate debts, and paying the company’s normal operating costs. Businesses also need cash on-hand to pay for expenses, repay bank loans, pay taxes, and to purchase new assets to fuel the company’s future growth. A company’s cash flow is documented in their cash flow statement. The cash flow statement, which is also known as a statement of cash flows, is a financial document that summarizes the amount of both cash and cash equivalents entering and exiting a company during a given time period. The cash flow report provides useful context for both a company’s balance sheet and income statement and has been a mandatory part of all corporate financial reports since 1987. The cash flow report is important because it informs investors, creditors, company owners, and other interested parties of the business cash position of the company and can act as a strong indicator of a company’s overall financial health.

Course Information


Price: $47
This course is included in our Mega CPE Subscription.


Course No. C017
Format: Online pdf (70 pages). Printed book available.
Prerequisites: None
Advance Preparation:None
Level: Intermediate
CPE Credit: 3 hrs.
Field of Study: Accounting
Course expiration:  You have one year from date of purchase to complete the course.
Course Revision Date: March 2022

Objectives

 

At the end of this Understanding the Statement of Cash Flows course, students will be able to:

  • Identify the purpose of the cash flow statement.
  • Identify the major classifications of cash flows.
  • Recognize the difference between net income and net cash flow from operating activities.
  • Calculate net cash flows from operating activities using the indirect method and using the direct method.
  • Recognize net cash flows from a company’s investing and financing activities.
  • Identify sources of information for a company’s cash flow statement.
  • Recognize special problems that can surface when preparing a statement of cash flows.

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