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positive as the cash flow
Depreciation does not effect cash flow statement as depreciation is not a cash expense rather it is just a treatement to dispose off the value of asset according to useful life of asset and the cost of asset is already shown in cash flow statement when asset is purchased.
structure of cash flow statement as follows:1
Another name of cash flow statement is fund flow statement.
depreciation is not part of cash flow statement and in indirect method for cash flow it will be added back to cash flow from operating activities.
The increase of A/P on the statement of cash flow show?
positive as the cash flow
Absolutely, the cash flow statement is useful to show the ability of a business to meet it obligations. For instance an income statement is specifically reduced by non-cash items like depreciation. Consider your car, when you buy it (assuming you pay cash for it), this results in a negative cash flow, as time goes on the value of the car decreases, but no further cash is expended.
Another name of cash flow statement is fund flow statement.
Cash flow statement is the statement which show the cash flow from operating, financing and investing activities.
Depreciation does not effect cash flow statement as depreciation is not a cash expense rather it is just a treatement to dispose off the value of asset according to useful life of asset and the cost of asset is already shown in cash flow statement when asset is purchased.
effect of negative cash flow
Yes it is correct as cash flow statement only deals in cash so non cash items should be eliminated from cash flow statement.
structure of cash flow statement as follows:1
Negative cash flow means cash outflow from business and overall negative cash flow means more cash outflows from business then cash inflow.
Prime purpose of preparing cash flow statement is to tally the closing bank balance with opening bank balance so if there is a bank overdraft or negative bank balance it will automatically adjusted when complete cash flow statement is prepared. If after the preparation of cash flow, cash flow balance and bank balance don't tally it means there is some mistake in cash flow statment and it should be reviewed for any correcions.
Free cash flow is the sum of operating and investing cash flows, which are reported on the cash flow statement.