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  • Statement of Cash Flows - Direct Method Formula

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    KATHRYN CLAUDETTE RESENTE
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    This document outlines the formula for calculating cash flow from operating activities using the direct method. It lists the components as cash received from customers, cash paid to suppliers, cash paid for operating expenses, cash interest paid, cash payments for income taxes, and other cash received or paid. The totals of these components provide the net cash provided or used by operating activities.

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    Statement of Cash Flows- Direct Method Formula

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    This document outlines the formula for calculating cash flow from operating activities using the direct method. It lists the components as cash received from customers, cash paid to suppliers, cash paid for operating expenses, cash interest paid, cash payments for income taxes, and other cash received or paid. The totals of these components provide the net cash provided or used by operating activities.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    40 views1 page

    Statement of Cash Flows - Direct Method Formula

    Uploaded by

    KATHRYN CLAUDETTE RESENTE
    This document outlines the formula for calculating cash flow from operating activities using the direct method. It lists the components as cash received from customers, cash paid to suppliers, cash paid for operating expenses, cash interest paid, cash payments for income taxes, and other cash received or paid. The totals of these components provide the net cash provided or used by operating activities.

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    © All Rights Reserved
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    of 1

    CASH FLOW FROM OPERATING ACTIVITIES (FORMULA FOR DIRECT METHOD)

    GROUP 1:
    Cash Received from Customers = Sales + Decrease (or - Increase) in Accounts Receivable.

    Cash Paid to Suppliers = Cost of Goods Sold + Increase (or - Decrease) in Inventory + Decrease (or -
    Increase) in Accounts Payable

    Cash Paid for Operating Expenses (Includes Research and Development) = Operating Expenses +
    Increase (or - decrease) in prepaid expenses + decrease (or - increase) in accrued liabilities.

    GROUP 2:
    Cash Interest = Interest Expense - increase (or + decrease) in interest payable + amortization of bond
    premium (or - discount).

    GROUP 3:
    Cash Payments for Income Taxes = Income Taxes + Decrease (or - increase) in Income Taxes Payable.

    Income Tax Refund Paid

    GROUP 4:
    Other Cash received (paid)

    The Total of these give the net cash provided (used) in operating activities.

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