FINANCIAL ACCOUNTING Fifth Edition Thomas Dyckman Robert Magee
FINANCIAL ACCOUNTING Fifth Edition Thomas Dyckman Robert Magee Michelle Hanlon Glenn Pfeiffer CHAPTER 4 Reporting and Analyzing Cash Flows ©Cambridge Business Publishers, 2017
2 Learning Objective 1 Explain the purpose of the statement of cash flows and classify cash transactions by type of business activity: operating, investing, or financing. ©Cambridge Business Publishers, 2017
3 Purpose of the Statement of Cash Flows § Provides information about how a company generates cash and how it uses cash § Enables investors and creditors § To better assess a firm’s ability to settle its liabilities and pay dividends § To determine a company’s need for outside financing § Permits users to observe and assess management’s investing and financing policies ©Cambridge Business Publishers, 2017
4 Cash and Cash Equivalents § Short-term, highly liquid investments that are § Easily convertible into a known amount of cash, and § Close enough to maturity that their market value is not sensitive to interest rate changes § Generally investments with initial maturities of three months or less § Examples of cash equivalents § Money market accounts § Treasury bills § Commercial paper ©Cambridge Business Publishers, 2017
5 Cash and Cash Equivalents § On the statement of cash flows § Cash equivalents are added to cash § Treated as a single sum § Why? § The purchase and sale of investments in cash equivalents are considered to be part of a firm’s overall management of cash rather than a source or use of cash § Managers refer to cash and cash equivalents as ‘cash’ Same label used in the textbook ©Cambridge Business Publishers, 2017
Target’s Statement of Cash Flows Operating Activities Section Target Corporation Consolidated Statement of Cash Flows (millions) Operating activities Net (loss)/earnings Losses from discontinued operations, net of tax Net earnings from continuing operations Reconciliation to cash flow: Depreciation and amortization Share-based compensation expense Deferred income taxes Loss on debt extinguishment Noncash (gains)/losses and other, net Changes in operating accounts: Inventory Other assets Accounts payable and accrued liabilities Cash provided by operating activities - continuing operations Cash provided by operating activities - discontinued operations Cash provided by operations ©Cambridge Business Publishers, 2017 Fiscal Year 2014 ($1, 636 ) (4, 085 ) 2, 449 2, 129 71 7 285 40 (512 ) (115 ) 777 5, 131 (692 ) $4, 439 Target generated $4, 439 million of cash from operations during its year ending Jan 31, 2015. 6
Target’s Statement of Cash Flows Investing and Financing Sections Target Corporation Consolidated Statement of Cash Flows (millions) Investing activities Expenditures for property and equipment Proceeds from disposal of property and equipment Cash paid for acquisitions, net of assumed cash Other investments Cash required for investing activities - continuing operations Cash required for investing activities - discontinued operations Cash required for investing activities Fiscal Year 2014 ($1, 786 ) 95 (20 ) 106 (1, 605 ) (321 ) (1, 926 ) Financing activities Change in commercial paper, net Additions to long-term debt Reductions of long-term debt Dividends paid Stock options exercises and related tax benefit Cash required for financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period ©Cambridge Business Publishers, 2017 (80 ) 1, 993 (2, 079 ) (1, 025 ) 373 (998 ) 1, 515 695 $2, 210 Target used cash from operations for financing activities and investing activities during its year ending January 31, 2015. 7
Framework for the Statement of Cash Flows Cash receipts and payments are classified into one of three categories: Operating Activities Investing Activities Financing Activities Change in cash and cash equivalents ©Cambridge Business Publishers, 2017 8
9 Operating Activities § The focus is on selling goods or rendering services § Defined broadly enough to include any cash receipts or payments that are not classified as investing or financing activities Where are operating activities reported? Income Statement of Cash Flows Accrual Basis Cash Basis ©Cambridge Business Publishers, 2017
10 Examples of Operating Activities Operating activities include cash received and paid related to selling goods and rendering services and are directly related to the company’s primary dayto-day business activities. ©Cambridge Business Publishers, 2017
11 Investing Activities Cash Flows Involving… 1. Acquiring and disposing of property, plant, and equipment and intangible assets 2. Purchasing and selling government securities including other company’s stocks, bonds, and other non cash-equivalent securities 3. Lending and subsequent collection of money ©Cambridge Business Publishers, 2017
12 Financing Activities Cash Flows Involving… 1. Receiving cash from shareholders 2. Returning cash to shareholders 3. Borrowing from creditors 4. Repaying amounts borrowed from creditors ©Cambridge Business Publishers, 2017
13 Usefulness of Classifications Three competitors generated $100, 000 of cash: Summary Information for Three Competitors A likely recurring source that can sustain the company. ©Cambridge Business Publishers, 2017 Not likely to recur. Will replacement assets be needed? Repayment required.
14 Learning Objective 2 Construct the operating activities section of the statement of cash flows using the direct method. (Part 1) ©Cambridge Business Publishers, 2017
Preparing the Statement of Cash Flows Operating Activities Option 1 § Examine all cash transactions that occur during the period Often not practical § Group them according to the type of activity Option 2 § Reconcile the income statement and balance sheet information § Changes in balance sheet accounts are explained on the income statement and statement of cash flows § Group them according to the type of activity ©Cambridge Business Publishers, 2017 Commonly used approach 15
16 Option 2: Preparing the Operating Section of the Statement of Cash Flows Income Statement Cash Flow Statement Revenues Cash Receipts Expenses Cash Expenditures The difference between a revenue or an expense reported in the income statement and a related cash receipt or expenditure reported in the statement of cash flows will be reflected as a change in one or more balance sheet accounts. Net Income + Adjustments = Cash flow operations or, more specifically… ©Cambridge Business Publishers, 2017
Preparing the Operating Section of the Statement of Cash Flows 17 § Start with the income statement and balance sheet. Convert revenue and expenses to cash flows from operating activities with the following adjustments: 1) Convert sales revenues to cash receipts from customers 2) Convert cost of goods sold to cash paid for merchandise purchased 3) Convert wages expense to cash paid to employees 4) Convert rent expense and advertising expense to cash paid amounts 5) Convert other adjusting entries to cash flows 6) Eliminate depreciation expense and other noncash operating expenses ©Cambridge Business Publishers, 2017
18 Jana Juice’s Information Jana Juice Balance Sheet For Month Ended June 30, 2016 May 31, 2016 Assets Cash Accounts receivable Interest receivable Inventory Prepaid insurance $10, 460 $ 6, 460 4, 100 1, 700 60 0 1, 600 700 600 800 1, 800 18, 620 11, 460 10, 200 0 (170) 0 10, 030 0 $28, 650 $11, 460 $2, 600 $500 Unearned revenue 800 300 Wages payable 550 0 Interest payable 120 0 Income tax payable 606 0 4, 676 800 Notes payable 12, 000 0 Total liabilities 16, 676 800 10, 000 1, 974 660 $28, 650 $11, 460 Security deposit Current assets Fixtures and equipment Less: Accumulated depreciation – Fixtures/equipment Equipment, net Total assets Liabilities Accounts payable Current liabilities Equity Common stock Retained earnings Total liabilities & equity ©Cambridge Business Publishers, 2017 We will use Jana Juice’s June information to prepare the statement of cash flows. Jana Juice Income Statement For Month Ended June 30, 2016 Revenues Sales revenue $7, 600. Expenses Cost of goods sold Wages expense $1, 700 1, 950 Rent expense 700 Advertising expense 800 Insurance expense 200 Depreciation expense 170 Operating expense $5, 520. Income from operations 2, 080. Interest expense Interest income Income before taxes Income tax expense Net income (120) 60. 2, 020. 606. $1, 414.
1) Convert Sales Revenues to Cash Received From Customers Cash flow (Collections) = 19 Net income – Change in + accounts receivable unearned revenue (Revenue) ©Cambridge Business Publishers, 2017
1) Convert Sales Revenues to Cash Received From Customers Using the FSET totals from the prior slide: The relationship can be rewritten as follows: Therefore, cash received from customers is $5, 700. ©Cambridge Business Publishers, 2017 20
2) Convert Cost of Goods Sold to Cash Paid for Merchandise Purchased Net income Cash flow = (COGS expense) – (Payments) ©Cambridge Business Publishers, 2017 Change in + accounts payable inventory 21
2) Convert Cost of Goods Sold to Cash Paid for Merchandise Purchased Using the FSET totals from the prior slide: The relationship can be rewritten as follows: Therefore, cash paid for inventory is $500. ©Cambridge Business Publishers, 2017 22
3) Convert Wages Expense to Cash Paid to Employees The relationship can be rewritten as follows: Therefore, cash paid for wages is $1, 400. ©Cambridge Business Publishers, 2017 23
Learning Objective 2 Part 2 Construct and explain the statement of cash flows. Operating Activities ©Cambridge Business Publishers, 2017
25 4) Convert Rent Expense and Advertising Expense to Cash Paid Amounts For these items, the cash amount paid is exactly equal to the amount recorded as an expense, so no adjustment is necessary. Therefore, cash paid for rent is $700 and cash paid for advertising is $800. ©Cambridge Business Publishers, 2017
26 5) Other Adjustments‒Convert Insurance Expense to Cash Paid for Insurance The relationship can be rewritten as follows: Therefore, cash paid for insurance is $0. ©Cambridge Business Publishers, 2017
27 5) Other Adjustments‒Convert Interest Expense to Cash Paid for Interest The relationship can be rewritten as follows: Therefore, cash paid for interest is $0. ©Cambridge Business Publishers, 2017
5) Other Adjustments‒Convert Interest Income to Cash Received for Interest The relationship can be rewritten as follows: Therefore, cash paid for interest is $0. ©Cambridge Business Publishers, 2017 28
29 5) Other Adjustments‒ Convert Income Tax Expense to Cash Paid for Income Taxes The relationship can be rewritten as follows: Therefore, cash paid for taxes is $0. ©Cambridge Business Publishers, 2017
5) Other Adjustments‒ Eliminate Depreciation Expense and Noncash Operating Expenses The relationship can be rewritten as follows: As depreciation is a noncash item, cash paid for depreciation is always $0. ©Cambridge Business Publishers, 2017 30
5) Other Adjustments‒Eliminate Non-Operating Gains and Losses Omit any gains and losses related to investing and financing activities. § Removed because: § Not related to operating activities § Not cash flow amounts § Examples § Gains and losses due to sale of plant assets § Gains and losses from the retirement of bonds payable Jana Juice did not have any gains or losses related to investing or financing activities in June 2016. ©Cambridge Business Publishers, 2017 31
Learning Objective 3 Reconcile cash flows from operations to net income and use the indirect method to compute operating cash flows. ©Cambridge Business Publishers, 2017
33 Summary of Adjustments for Jana Juice ©Cambridge Business Publishers, 2017
34 Summary of Adjustments to Convert Income Statement Items to Cash from Operations Revenues, expenses, gains, and losses in the income statement are converted to cash receipts and payments. Adjustments to Convert Income Statement Items to Cash Flows From Operating Activities ©Cambridge Business Publishers, 2017
Operating Activities Section of the Statement of Cash Flows There was no cash received or paid for interest, insurance, or taxes, and depreciation expense is never a cash flow, so these items are not listed. This presentation uses the direct method because it lists all of the cash flows directly. ©Cambridge Business Publishers, 2017 35
Cash Flows From Operating Activities Direct vs. Indirect Method 36 Direct or indirect method? § Differ only in the operating activities format § Both report the same cash flows from operating activities Why is the indirect method preferred? 1) Easier and less expensive 2) Companies that use the direct method are required to present a supplemental disclosure showing the reconciliation of net income to cash from operations. ©Cambridge Business Publishers, 2017
Operating Activities Section of the Statement of Cash Flows— Indirect Net cash provided by operating activities is the same amount calculated using either the direct or the indirect methods. This is the indirect method because it begins with net income and converts the accrual basis net income to cash flows. ©Cambridge Business Publishers, 2017 37
38 Learning Objective 4 Construct the investing and financing activities sections of the statement of cash flows. ©Cambridge Business Publishers, 2017
39 Cash Flows From Investing Activities § Cause changes in noncash asset accounts, typically, § Noncurrent operating assets—property, plant, and equipment § Investing assets—marketable securities and long-term financial assets § Analyze changes in all noncash asset accounts not used in computing net cash flow from operating activities Cash flows decrease due to: An increase in assets Cash flows increase due to: A decrease in assets ©Cambridge Business Publishers, 2017
Cash Flows From Investing Activities Any changes in the Fixtures and Equipment account in the balance sheet is usually the result of one or both of the following transactions: 1) Buying assets, or 2) Selling assets Jana Juice had only one investing transaction during June ‒the purchase of fixtures and equipment. The resulting $10, 200 cash outflow is listed in the statement of cash flows under cash flow used for investing activities. ©Cambridge Business Publishers, 2017
41 Financing Activities Cash Flows § Cause changes in financing liabilities and stockholders’ equity accounts § Long-term liabilities and some short-term notes payable § Stockholders’ equity § Analyze changes in all liability and stockholders’ equity accounts not used in computing net cash flow from operating activities Cash flows increase due to: An increase in liabilities or stockholders equity Cash flows decrease due to: A decrease in liabilities or stockholders equity ©Cambridge Business Publishers, 2017
42 Cash Flows From Financing Activities Jana Juice had two financing activities during June: § The $12, 000 cash inflow from the loan is listed in the statement of cash flows under cash flow from financing activities. § The dividend payment is a financing activity cash outflow and would be deducted from cash flow from financing activity. ©Cambridge Business Publishers, 2017
43 Cash Flows From Financing Activities Retained earnings can be analyzed for increases and decreases: Retained Earnings 660 1, 414 100 Net income 1, 974 Cash decreased by $100 as a result of the dividend payment. Cash paid for dividends ©Cambridge Business Publishers, 2017 $100
44 Gains and Losses § FASB requires that financing and investing items be included at gross cash amounts in the statement of cash flows § Gains § Result when plant assets are sold for more than their book value § Are special revenue accounts § Losses § Result when plant assets are sold for less than their book value § Are special expense accounts ©Cambridge Business Publishers, 2017
Jana Juice’s Statement of Cash Flows The operating activities section was prepared using the indirect method. The statement of cash flows shows the change in ‘cash’ during June 2016. ©Cambridge Business Publishers, 2017 Jana Juice Statement of Cash Flows For Month Ended June 30, 2016 Cash flows provided by operating activities Net income Adjustments: Add back depreciation expense 170 Subtract: Change in accounts receivable 2, 400 Change in inventory 900 Change in prepaid insurance (200) Change in interest receivable 60 Add: Change in accounts payable 2, 100 Change in unearned revenue 500 Change in wages payable 550 Change in interest payable 120 Change in income tax payable 606 Total adjustments Cash flow from operating activities Cash Flows from Investing Activities Cash paid for fixtures and equipment Net cash used by investing activities Cash Flows from Financing Activities Cash received from loans Cash paid for dividends Net cash provided by financing activities Net change in cash Cash balance, June 1, 2016 Cash balance, June 30, 2016 $1, 414 1 886 2, 300 (10, 200) 12, 000 (100) 11, 900 4, 000 6, 460 $10, 460 2 3 45
Noncash Investing and Financing Activities § Not all significant investing and financing events affect current cash flows § Examples § Issue stock in exchange for land § Purchase a building by Noncash investing and financing transactions are supplemental to the statement of cash flows. ©Cambridge Business Publishers, 2017 46
47 Supplemental Disclosures Three disclosures are required: § Cash paid for interest and for income taxes if the indirect method is used § A schedule of all noncash investing and financing activities § Policy for determining which highly liquid, short -term investments are treated as cash equivalents ©Cambridge Business Publishers, 2017
48 Learning Objective 5 Compute and interpret ratios that reflect a company’s liquidity and solvency using information reported in the statement of cash flows. ©Cambridge Business Publishers, 2017
49 Operating Cash Flow to Current Liabilities A measure of the ability to liquidate current liabilities Applying the Operating Cash Flow to Current Liabilities Ratio to Golden Enterprises: ©Cambridge Business Publishers, 2017
50 Operating Cash Flow to Current Liabilities Golden Enterprise, Inc. vs. Competitors Over the past three years, Golden Enterprises’ OCFCL ratio is consistently lower than the two competitors that are included in the graph. Snyder’s-Lance’s ratio is near the industry average for 2012 and 2013 but increases in 2014. ©Cambridge Business Publishers, 2017
Operating Cash Flow to Current Liabilities Golden Enterprise, Inc. vs. Focus Companies ©Cambridge Business Publishers, 2017
Operating Cash Flow to Capital Expenditures and Free Cash Flow Helps assess if a firm is able to replace, and expand property, plant, and equipment. Applying the Operating Cash Flow to Capital Expenditures Ratio and Free Cash Flow to Golden Enterprises: ©Cambridge Business Publishers, 2017 52
Operating Cash Flow to Capital Expenditures Golden Enterprise, Inc. vs. Competitors OCFCX increased over the last three years for Golden Enterprises, but its OCFCX is substantially lower than either of the two comparison companies from the same industry. Snyder’s-Lance and J&J Snack Foods have used the additional cash flow to acquire other businesses, pay dividends and repay long-term debt. ©Cambridge Business Publishers, 2017
54 Learning Objective 6 Appendix 4 A Use a spreadsheet to construct the statement of cash flows. ©Cambridge Business Publishers, 2017
55 Step 1: Classify the Balance Sheet Accounts We will use the information from Jana Juice to walk through the spreadsheet approach. For each account other than cash, classify as Operating (O), Investing (I), or Financing (F) Two accounts have a double classification ©Cambridge Business Publishers, 2017 Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Accounts payable Unearned revenue Wages payable Interest payable Income tax payable Notes payable Common stock Retained earnings O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 O 2, 600 O 800 O 550 O 120 O 606 F 12, 000 F 10, 000 O, F 1, 974 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 500 300 0 0 10, 000 660
Step 2: Compute the Changes in the Balance Sheet Accounts Subtract the beginning balances in each account from the ending balances Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Accounts payable Unearned revenue Wages payable Interest payable Income tax payable Notes payable Common stock Retained earnings O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 O 2, 600 O 800 O 550 O 120 O 606 F 12, 000 F 10, 000 O, F 1, 974 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 500 300 0 0 10, 000 660 Amount of Change $4, 000 2, 400 60 900 (200) 0 10, 030 2, 100 550 120 606 12, 000 0 1, 314 ∆Cash = ∆Liabilities + ∆Stockholders’ Equity ‒ ∆Noncash Assets ©Cambridge Business Publishers, 2017 56
Step 3: Handle Accounts With Single Classifications Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Accounts payable Unearned revenue Wages payable Interest payable Income tax payable Notes payable Common stock Retained earnings O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 O 2, 600 O 800 O 550 O 120 O 606 F 12, 000 F 10, 000 O, F 1, 974 ©Cambridge Business Publishers, 2017 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 500 300 0 0 10, 000 660 Amount of Change Operating $4, 000 2, 400 (2, 400) 60 (60) 900 (900) (200) 200 0 0 10, 030 2, 100 500 550 120 606 12, 000 0 1, 314 Investing Financing 12, 000 0 57
Step 4: Enter the Effect of Investing and Financing Transactions that Do Not Involve Cash An example of an investing/financing transaction would be the purchase of plant assets with a note payable Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Accounts payable Unearned revenue Wages payable Interest payable Income tax payable Notes payable Common stock Retained earnings O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 O 2, 600 O 800 O 550 O 120 O 606 F 12, 000 F 10, 000 O, F 1, 974 ©Cambridge Business Publishers, 2017 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 500 300 0 0 10, 000 660 No Effect Amount of Change Operating Investing Financing on Cash $4, 000 2, 400 (2, 400) 60 (60) 900 (900) Jana Juice had (200) 200 NO noncash 0 0 investing/financing 10, 030 transactions 2, 100 500 550 120 606 12, 000 0 0 1, 314 58
59 Step 5: Analyze the Changes in Retained Earnings Accounts that involve two types of cash flows require special attention. The change in retained earnings involves net income (O) and dividends (F). Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Accounts payable Unearned revenue Wages payable Interest payable Income tax payable Notes payable Common stock Retained earnings Net income Dividends O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 O 2, 600 O 800 O 550 O 120 O 606 F 12, 000 F 10, 000 O, F 1, 974 ©Cambridge Business Publishers, 2017 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 500 300 0 0 10, 000 660 Amount of Change Operating Investing $4, 000 2, 400 (2, 400) 60 (60) 900 (900) (200) 200 0 0 10, 030 2, 100 500 550 120 606 12, 000 0 1, 314 1, 414 Financing 12, 000 0 ($100) No Effect on Cash
Step 6: Analyze the Change in Plant Assets Another account that involves two types of cash flows is equipment. The change in the equipment, net account involves depreciation (O) and acquisition of plant assets (I). O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 2, 600 800 550 120 606 12, 000 10, 000 1, 974 500 300 0 0 10, 000 660 Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Depreciation Plant assets purchased Accounts payable O Unearned revenue O Wages payable O Interest payable O Income tax payable O Notes payable F Common stock F Retained earnings O, F Net income Dividends ©Cambridge Business Publishers, 2017 Amount of No Effect Change Operating Investing Financing on Cash $4, 000 2, 400 (2, 400) (60) 60 900 (900) (200) 200 0 0 10, 030 170 (10, 200) 2, 100 500 550 120 606 12, 000 0 0 1, 314 1, 414 ($100) 60
61 Step 7: Total the Columns O, I, F 6/30/2016 $10, 460 O 4, 100 O 60 O 1, 600 O 1, 800 O, I 10, 030 6/1/2016 $6, 460 1, 700 0 700 800 1, 800 0 Amount of Change Operating $4, 000 2, 400 (2, 400) 60 (60) 900 (900) (200) 200 0 0 10, 030 170 Cash Accounts receivable Interest receivable Inventory Prepaid insurance Security deposit Equipment, net Depreciation Plant assets purchased Accounts payable O 2, 600 500 2, 100 Unearned revenue O 800 300 500 Wages payable O 550 0 550 Interest payable O 120 0 120 Income tax payable O 606 0 606 Notes payable F 12, 000 0 12, 000 Common stock F 10, 000 0 Retained earnings O, F 1, 974 660 1, 314 Net income Dividends The sum of the column totals must equal the change in the cash account. ©Cambridge Business Publishers, 2017 Investing No Effect Financing on Cash Extra click placeholder (10, 200) 2, 100 550 120 606 12, 000 0 1, 414 $2, 300 ($100) ($10, 200) $11, 900 $0
62 Step 8. Prepare the Cash Flow Statement Prepare operating first Prepare investing second Prepare financing third Then reconcile the cash account ©Cambridge Business Publishers, 2017 Jana Juice Statement of Cash Flows For Month Ended June 30, 2016 Cash flows provided by operating activities Net income Adjustments: Add back depreciation expense 170 Subtract: Change in accounts receivable 2, 400 Change in inventory 900 Change in prepaid insurance (200) Change in interest receivable 60 Add: Change in accounts payable 2, 100 Change in unearned revenue 500 Change in wages payable 550 Change in interest payable 120 Change in income tax payable 606 Total adjustments Cash flow from operating activities Cash Flows from Investing Activities Cash paid for fixtures and equipment Net cash used by investing activities Cash Flows from Financing Activities Cash received from loans Cash paid for dividends Net cash provided by financing activities Net change in cash Cash balance, June 1, 2016 Cash balance, June 30, 2016 $1, 414 886 2, 300 (10, 200) 12, 000 (100) 11, 900 4, 000 6, 460 $10, 460
The End ©Cambridge Business Publishers, 2017
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