1. 6/19/2015Statement of Cash Flow1 Statement of Cash Flow and Normalized Statements

2. 6/19/2015Statement of Cash Flow2 Statement of Cash Flows 1.Where have funds come from 2.How have funds been used 3.Sources Liability and Equity Assets 4.Uses Liabilities and Equity Assets

3. 6/19/2015Statement of Cash Flow3 Sources and Uses of Funds

4. 6/19/2015Statement of Cash Flow4 Sources and Uses of Funds

5. 6/19/2015Statement of Cash Flow5 Cash inflows (1)Cash outflows Generation of Expenditure of funds funds in normal in normal operations operations (2) Sale of plantPurchase of plant and equipment Liquidation ofLong-term investment long-term investment (3) Sale of bonds,Retirement or common stock, repurchase of preferred stock, bonds, common stock, and other preferred stock, and securities other securities equals Payment of cash dividends Statement of Cash Flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities + + Add items 1, 2, and 3 together to arrive at net increase (decrease) in cash

6. 6/19/2015Statement of Cash Flow6 Cash Flows from Operating Net income Depreciation Increase in current assets Decrease in current assets Increase in current liabilities Decrease in current liabilities equals Net cash flow from operating activities + + +

7. 6/19/2015Statement of Cash Flow7 KRAMER CORPORATION Income Statement December 31, 2008

8. 6/19/2015Statement of Cash Flow8 KRAMER CORPORATION Comparative Balance Sheets (continued on next slide) Year-End Year-End Assets: 2007 2008

9. 6/19/2015Statement of Cash Flow9 KRAMER CORPORATION Comparative Balance Sheets (cont.) Year-End Year-End 2007 2008

10. 6/19/2015Statement of Cash Flow10 KRAMER CORPORATION Statement of Cash Flows For the Year Ending Dec. 31, 2008

11. 6/19/2015Statement of Cash Flow11 How do we know common stock dividends? Beginning Retained Earnings$250,000 + Net Income110,000 - Dividends X Ending Retained Earnings$300,000 X = $60,500

12. 6/19/2015Statement of Cash Flow12 Hermetic, Inc. 2008 Income Statement ($ in thousands)

13. 6/19/2015Statement of Cash Flow13 Hermetic, Inc. 2008 Common Size Income Statement

14. 6/19/2015Statement of Cash Flow14 Hermetic, Inc. Balance Sheet as of Dec. 31 ($ in thousands) Assets 2007 2008

15. 6/19/2015Statement of Cash Flow15 Hermetic, Inc. Common Size Balance Sheet 2007 2008

16. 6/19/2015Statement of Cash Flow16 Hermetic, Inc. Statement of Cash Flows 2008 ++--+++--+ ++-++-