CFA LV I > Cash Flow Statement > Flashcards

Cash Flow Statement Flashcards

(9 cards)

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1
Q

Indirect method: starting point

A

Net income

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2
Q

Why add back depreciation?

A

Noncash expense

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3
Q

AR increase effect on CFO

A

Decrease

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4
Q

AP increase effect on CFO

A

Increase

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5
Q

Inventory increase effect on CFO

A

Decrease

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6
Q

Direct method definition

A

Provides a clear picture of Actual cash inflows/outflows

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7
Q

CFI examples

A

PP&E purchases/sales

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8
Q

CFF examples

A

Debt/equity issuance, dividends

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9
Q

Why cash flow matters

A

Liquidity, solvency, flexibility

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CFA LV I
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