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    Background On Cash Flow Statement: RE - OCA+ OCL

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    Nosirjon Rakhimov
    The document provides background information on cash flow statements and outlines the direct and indirect methods for preparing a cash flow statement. It defines the key components of operating cash flows under the direct method as sales-related cash inflows, purchase-related cash outflows, other cash receipts and payments. It also indicates that non-cash revenues and expenses should be excluded from the operating activities calculation. The indirect method is defined as starting with net income and adjusting for non-cash items and changes in working capital.

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    Background On Cash Flow Statement: RE - OCA+ OCL

    Uploaded by

    Nosirjon Rakhimov
    16 views4 pages
    The document provides background information on cash flow statements and outlines the direct and indirect methods for preparing a cash flow statement. It defines the key components of operating cash flows under the direct method as sales-related cash inflows, purchase-related cash outflows, other cash receipts and payments. It also indicates that non-cash revenues and expenses should be excluded from the operating activities calculation. The indirect method is defined as starting with net income and adjusting for non-cash items and changes in working capital.

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    Cashflow Statement

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    The document provides background information on cash flow statements and outlines the direct and indirect methods for preparing a cash flow statement. It defines the key components of operating cash flows under the direct method as sales-related cash inflows, purchase-related cash outflows, other cash receipts and payments. It also indicates that non-cash revenues and expenses should be excluded from the operating activities calculation. The indirect method is defined as starting with net income and adjusting for non-cash items and changes in working capital.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    16 views4 pages

    Background On Cash Flow Statement: RE - OCA+ OCL

    Uploaded by

    Nosirjon Rakhimov
    The document provides background information on cash flow statements and outlines the direct and indirect methods for preparing a cash flow statement. It defines the key components of operating cash flows under the direct method as sales-related cash inflows, purchase-related cash outflows, other cash receipts and payments. It also indicates that non-cash revenues and expenses should be excluded from the operating activities calculation. The indirect method is defined as starting with net income and adjusting for non-cash items and changes in working capital.

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    of 4

    Background on Cash Flow Statement

    Asset = Liabilities + Equity CA+ NCA= CL+ NCL+ C+ RE Cash +OCA+NCA=SB+OCL+NCL+C+RE Cash +OCA+NCA=SB+OCL+NCL+C+RE

    Cash= RE-OCA+OCL -NCA +SB+NCL+C

    Cash Flow Statement-Direct Method


    Cashflow due to Operating Activities
    1) Sales related 2)Purchase related 3)Other Receipt 4)Other Payment =Sales Increase-AR increase =COGS+Inventory Increase-AP Increase =Other Revenue =Selling & Admin Exp+Other Exp =(Sales-COGS+Other Revenue-Selling & Admin Exp-Other Exp-Corporation Tax)+(-AR increaseInventory Increase+AP Increase) =A + B

    5)Corporation Tax
    1-2+3-4-5

    A should not include Revenue & Expenses, which have nothing to do with Cashflow

    Cash Flow Statement-Direct Method


    Revenue & Expenses, Which Have Nothing to Do With Cash Flow
    Revenue W/O Cash flow(C) Expenses W/O Cash flow(D) Gain on PPE disposal Gain on PPE disposal Depreciation Cost Gain on Investment Asset Disposal Gain on FX evaluation Loss on Investment Asset Disposal Loss on FX evaluation

    A+C-D= Net Income

    Cash Flow Statement-Indirect Method


    A+C-D= Net Income

    Net Income=A+C-D
    In order to come up with cash flow using Direct Method(ie; A+B), Net Income +B = A+C-D+B A+B = Net Income-C+D+B A+B Direct Method Net Income C+D+B Indirect Method

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