Hour 1-Role, decision, goals-Business size-up (REMEMBER IMPLICATIONS)Industry analysisConsumer analysisCompetitive analysisCorporate size-up (corporate capabilities)Hour 2-Make SCFIncreaseDecreaseAssetUseSourceLiabilitySourceUseEquitySourceUseAdd sources, subtract usesStatement of Cash Flows1. OperationsNet Income (after tax)Add: Depreciation (from statement of earning)Add: loss on sale OR Subtract: gain on saleAdd/Subtract: Changes in current accountsAdd/Subtract Changes in Working Capital (from SoFP)Accounts ReceivableInventoryAccounts PayablesNET CASH FLOW FROM OPERATIONS2. FinancingAdd/Subtract: increases and decreases from SOFP

[Reconstruct retained earnings (or owner’s equity) to find dividends]Subtract: dividendsNET CASH FLOW FROM FINANCING3. Investing[Changes in non-current assets, excluding trading investments][Reconstruct and depreciable asset accounts (same as depreciation from earlier), don’t forget about any disposals, loss, or gains, PLUG for net purchases]Add/Subtract: Net Purchases (Add if PLUG is on debit side, subtract if credit)NET CASH FLOW FROM INVESTINGNET CASH FLOWBEGINNING CASH (last years ending cash)ENDING CASH (should match)SCF analysis→ Implications from statement1a. Is NCF from operations positive or negative? Why?1b. How does our working capital compare? Is there a cash gap (A/R+A/P + Inventory), and are we worried about it? → if it is a large and increasing use of cash then it is bad. I other words, we want this number to be positive or to be more positive then the previous year2a. Major sources and uses → identify 2 largest, don’t include non-cash2b. Are they short term or long term3. Matching short with short and long with long? (be sure to look at relative size)

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Usesstatement Of Cash Flows1 And Industry Analysisconsumer Analysiscompetitive Analysiscorporate Size. (April 2, 2021). Retrieved from