Indirect Method Cash Flow Statement

Under the indirect method cash flow statement, operating cash flow is calculated by reconciling net income to cash flow.  The reconciliation involves (a) adding back […]

Book value refers to the accounting net worth, or owner’s equity, of the business.  Book value is presented on the balance sheet in the owner’s […]

Current assets are economic resources which the firm expects to sell, convert to cash, or consume within the greater of one year or the firm’s […]

Current liabilities are obligations to the firm which must be settled within the greater of one year or an operating cycle.   Typical current liabilities include […]

Cash flow from investing activities, also called investing cash flow, refers to the net difference between cash sources and cash uses related to a firm’s […]

Common stock refers to the equity units of a corporation.   Each stock is called a share. When a company creates its main formation document, known […]

Cash flow from financing activities, also called financing cash flow, is the net cash flow associated with payments made from and to the firm’s capital […]

Assets are resources that are expected to provide the firm with future economic benefits.  Assets may be categorized as long-term or current. A current asset […]

Cash equivalents are financial securities which can be sold quickly and without impairment in value. Common cash equivalent securities include U.S. Treasury bills and commercial […]

Cash flow from operations, also called operating cash flow, refers to the difference between cash received from operating sources and cash disbursed for inventory and […]