Shareholders’ equity is the total amount of equity in the firm. The shareholders’ equity section of the balance sheet is explained in further detail on the statement of shareholders’ equity. • Cash Flow Statement The cash flow statement shows the amount of cash within a company. Items that affect the cash balance are listed on the statement. The first section of the cash flow statement is operating activities, which shows the cash flowing in and out of the
government, as necessary. Please complete the following: a. What are the four major financial statements and, in depth, discuss their purpose. The four major financial statements are the balance sheet, the income statement, the retained earnings statement and the statement of cash flows. The Balance Sheet reports the company’s
CHAPTER 12 Statement of Cash Flows Study Objectives 1. Indicate the usefulness of the statement of cash flows. 2. Distinguish among operating, investing, and financing activities. 3. Explain the impact of the product life cycle on a company’s cash flows. 4. Prepare a statement of cash flows using the indirect method. 5. Use the statement of cash flows to evaluate a company. *6. Prepare a statement of cash flows using the direct method. Summary of Questions by Study Objectives
of depreciation method on operating earnings. Because operating earnings are instrumental in determining the performance evaluation and resulting bonus of the manager of a division, the ethics of the choice are considered. 30 Medium 25.4 A,B Tootsie Roll Industries This problem demonstrates that information found in annual reports can be used to evaluate business segments. Financial information for computing ROI, capital turnover, and return on sales is included. 20 Medium 25.5 A,B Fastwhere