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Starting with Net Income, “build” a standard cash flow statement, show segmentation

Starting with Net Income, “build” a standard cash flow statement, show segmentation

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Answer #1

A Standard Cash Flow Statement Format:

Operating Activities:

Net Income

+ Depreciation and Amortization

+/- One Time Adjustments (i.e. investment gains or losses not related to operations, deferred taxes, stock compensation)

+/- Changes in Working Capital

= Cash Flow From Operations

Investing Activities:

+/- Net Capital Expenditures

+/- Net Investments

= Cash Flow from Investing Activities

Financing Activities

– dividends

+/- sale or purchase of company stock

+/- net borrowings

= Cash Flow from Financing Activities

Summary of Cash Flow Activities:

+/- Cash Flow From Operating Activities

+/- Cash Flow From Investing Activities

+/- Cash Flow From Financing Activities

= Net Change in Cash

+ Beginning Cash Balance

= Ending Cash Balance

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