Chapter 13
Statement of Cash Flows
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Business Background
Positive cash flows permit a company to . . .
Pay
dividends to
owners.
Take advantage
of market
opportunities.
Expand its
operations.
Replace needed
assets.
Wall
Wall Street
Street analysts
analysts consider
consider cash
cash flow
flow an
an
important
important indicator
indicator of
of aa company’s
company’s financial
financial
health.
health.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Classifications on the Statement
of Cash Flows
Cash
Equivalents
Cash
Cash
Currency
Short-term,
Short-term,highly
highlyliquid
liquidinvestments.
investments.
!! Readily
Readilyconvertible
convertibleinto
intocash.
cash.
!! So
Sonear
nearmaturity
maturitythat
thatmarket
marketvalue
valueis
isunaffected
unaffectedby
by
interest
interestrate
ratechanges.
changes.
!!
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Classifications on the Statement
of Cash Flows
The
The SCF
SCF must
must include
include the
the following
following
three
three sections,
sections, as
as defined
defined in
in FASB
FASB
Statement
Statement 95:
95:
"
Operating Activities
"Operating
Activities
#
Investing Activities
#Investing
Activities
$
Financing Activities
$Financing
Activities
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
1,225
Stock option compensation expense
59
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Other current assets
(38)
Other assets (long-term receivables)
79
Accounts payable
(1,631)
Accrued expenses
(2,857)
Net cash provided by (used in) operating activities
1,294
The
Theindirect
indirect
method
methodisis
used
usedby
by
98.3%
98.3%of
of
companies.
companies.
Boston
Boston
Beer
Beeruses
uses
the
theindirect
indirect
method.
method.
Statement continued . . .
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
Cash flows for investing activities:
Purchases of fixed assets
Purchases of short-term investments
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from sale of shares
Net borrowing under line of credit
Net cash provided by financing activities
Net increase (decrease) in cash & cash equivalents
Cash & cash equivalents at beginning of period
Cash & cash equivalents at end of period
Supplemental disclosure of cash flow information:
Interest paid
Income taxes paid
Irwin/McGraw-Hill
1,294
(2,198)
(438)
(2,636)
This
Thisending
ending
cash
cash
balance
balance
should
should
agree
agreewith
with
the
thebalance
balance
sheet.
sheet.
107
1,517
1,624
282
13
$295
193
47
© The McGraw-Hill Companies, Inc., 2001
Cash Flows from Operating
Activities
Cash
Cash inflows
inflows and
and
outflows
outflows that
that directly
directly
relate
relate to
to income
income
from
from normal
normal
operations
operations reported
reported
on
on the
the income
income
statement.
statement.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Cash Flows from Operating
Activities
Inflows
Inflows from:
from:
!!
!!
Sales
Salesto
tocustomers.
customers.
Interest
Interestand
anddividends
dividends
received.
received.
+
Outflows
Outflows to:
to:
Purchase
Purchasegoods
goodsto
toresell
resell
and
andservices.
services.
!! Salaries
Salaries&&wages.
wages.
!! Income
Incometaxes.
taxes.
!! Interest
Intereston
onliabilities.
liabilities.
!!
Irwin/McGraw-Hill
_
Cash
Cash
Flows
Flows
from
from
Operating
Operating
Activities
Activities
© The McGraw-Hill Companies, Inc., 2001
Cash Flows from Operating
Activities - Indirect Method
The
Theindirect
indirectmethod
methodadjusts
adjustsnet
netincome
incomeby
byeliminating
eliminating
noncash
noncashitems.
items.
Changes
Changesin
incurrent
currentassets
assets
and
andcurrent
currentliabilities.
liabilities.
Cash
CashFlows
Flows
from
fromOperating
Operating
Activities
Activities-Indirect
IndirectMethod
Method
Net
Net
Income
Income
++Losses
Lossesand
and
--Gains
Gains
Irwin/McGraw-Hill
++Noncash
Noncash
expenses
expensessuch
suchas
as
depreciation
depreciationand
and
amortization.
amortization.
© The McGraw-Hill Companies, Inc., 2001
Cash Flows from Investing
Activities
Inflows
Inflows from:
from:
Sale
Saleor
ordisposal
disposalof
ofproperty,
property,
plant,
plant,and
andequipment.
equipment.
!! Sale
Saleor
ormaturity
maturityof
ofinvestments
investments
in
insecurities.
securities.
!!
+
Outflows
Outflows to:
to:
Purchase
Purchaseproperty,
property,plant,
plant,and
and
equipment.
equipment.
!! Purchase
Purchaseinvestments
investmentsin
in
securities.
securities.
!!
Irwin/McGraw-Hill
_
Cash
Cash
Flows
Flows
from
from
Investing
Investing
Activities
Activities
© The McGraw-Hill Companies, Inc., 2001
Cash Flows from Financing
Activities
Inflows
Inflows from:
from:
Borrowing
Borrowingon
onnotes,
notes,
mortgages,
mortgages,bonds,
bonds,etc.
etc.from
from
creditors.
creditors.
!! Issuing
Issuingequity
equitysecurities
securitiesto
to
owners.
owners.
!!
+
Outflows
Outflows to:
to:
Repay
Repayprincipal
principalto
tocreditors
creditors
(excluding
(excluding interest).
interest).
!! Repurchase
Repurchaseequity
equitysecurities
securities
from
fromowners.
owners.
!! Pay
Paydividends
dividendsto
toowners.
owners.
!!
Irwin/McGraw-Hill
_
Cash
Cash
Flows
Flows
from
from
Financing
Financing
Activities
Activities
© The McGraw-Hill Companies, Inc., 2001
Relationships to the Balance
Sheet and the Income Statement
Information
Information needed
needed to
to prepare
prepare aa
statement
statement of
of cash
cash flows:
flows:
!! Comparative
Comparative Balance
Balance Sheets.
Sheets.
!! Income
Income Statement.
Statement.
!! Additional
Additional details
details concerning
concerning
different
different types
types of
of transactions
transactions
and
and events.
events.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Relationships to the Balance
Sheet and the Income Statement
∆∆ Cash
Cash == ∆∆ Liabilities
Liabilities ++ ∆∆ Stockholders’
Stockholders’
Equity
Equity −− ∆∆ Noncash
Noncash Assets
Assets
Derives from . . .
Assets
Assets == Liabilities
Liabilities ++ Stockholders’
Stockholders’ Equity
Equity
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Relationships to the Balance
Sheet and the Income Statement
Current
Assets
Current
Liabilities
Change in Account Balance During Year
Increase
Decrease
Subtract from net
Add to net income.
income.
Add to net income.
Subtract from net
income.
Use this table when adjusting Net Income
to Operating Cash Flows using the
indirect method.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
Statement of Cash Flows Indirect
Method Example
Using
Using The
The Boston
Boston
Beer
Beer Company,
Company,
let’s
let’s examine
examine the
the
preparation
preparation of
of the
the
Statement
Statement of
of Cash
Cash
Flows
Flows for
for the
the
quarter
quarter ended
ended on
on
March
March 28,
28, 1998.
1998.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
In Thousands Except Per Share Amounts
Sales
Less excise taxes
Net Sales
Cost of sales
Gross profit
Operating expenses:
Advertising, promotional, & selling expenses
General and administrative expenses
Total operating expenses
Operating income
Other income (expense):
Interest income
Interest expense
Other income (expense), net
Total other income
Income before income taxes
Provision for income taxes
Net income
Irwin/McGraw-Hill
Quarter ended
March 28, 1998
$51,660
6,412
45,248
21,428
23,820
13,540
3,224
16,764
7,056
The
TheStatement
Statement
of
ofCash
CashFlows
Flows
will
willbegin
beginwith
with
Boston
BostonBeer’s
Beer’s
Net
Netincome
income
from
fromthe
the
Income
Income
Statement.
Statement.
466
(170)
(2,556)
(2,260)
4,796
2,720
$2,076
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
In Thousands Except Per Share Amounts
Quarter ended
March 28, 1998
$51,660
6,412
45,248
21,428
23,820
The
TheNet
Net
income
income
number
numberwill
willbe
be
adjusted
adjustedfor
for
non-cash
non-cash
items.
items.
Sales
Less excise taxes
Net Sales
Cost of sales
Gross profit
Operating expenses:
In
of
Beer,
included
Advertising,
promotional,
& selling expenses
13,540
Inthe
thecase
case
ofBoston
Boston
Beer,those
thoseadjustments
adjustments
included
General
and administrative
3,224
depreciation
&&expenses
amortization
expense
($1,225)
depreciation
amortization
expense
($1,225)and
andfor
for
Total operating expenses
16,764
compensation
expense
compensation
expensein
inthe
theform
formof
ofstock
stockoptions
options($59).
($59).
Operating
income
7,056
Other
income (expense):
In
addition,
there
was
aa$2,317
loss
that
was
related
to
aa
In
addition,
there
was
$2,317
loss
that
was
related
to
Interest income
466
write-down
of
an
investment.
write-down of an investment.
Interest expense
(170)
Other income (expense), net
(2,556)
Since
Total
other those
income
(2,260)in
Since
thosenumbers
numbersare
arenot
notobvious
obvious
inthe
theIncome
Income
Income before income
taxes
4,796
Statement,
they
must
be
derived
from
other
sources,
such
Statement,
they
must
be
derived
from
other
sources,
such
Provision for income taxes
2,720
as
the
Net
$2,076 or
asincome
theNotes
Notesto
tothe
theFinancial
FinancialStatements,
Statements,
orthe
theGeneral
General
Ledger
LedgerTrial
TrialBalance.
Balance.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
With
With the
the indirect
indirect method,
method,
always
always start
start with
with the
the net
net income
income
or
or net
net loss
loss for
for the
the period.
period.
Next,
Next, adjust
adjust for
for the
the non-cash
non-cash
items
items included
included in
in net
net income.
income.
Net cash provided by (used in) operating activities
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adj. to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
1,225
Stock option compensation expense
59
Loss on write-down of equity securities
2,317
To
Tocomplete
completethe
theCash
Cashflows
flowsfrom
fromoperating
operatingactivities
activities
section,
section,you
youmust
mustexamine
examineaacomparative
comparativebalance
balance
sheet
sheetto
todetermine
determinethe
thechanges
changesin
incurrent
currentassets
assetsand
and
current
currentliabilities
liabilitiesfrom
fromthe
thebeginning
beginningof
ofthe
theperiod
periodto
to
the
theend
endof
ofthe
theperiod.
period.
Net cash provided by (used in) operating activities
Comparative Balance Sheets . . .
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED BALANCE SHEET
March 28,
1998
(Unaudited)
In Thousands
ASSETS
Current assets:
Cash & cash equivalents
Short-term investments
Accounts Receivable
Inventories
Prepaid expenses
Deferred income taxes
Other current assets
Total current assets
Equipment, net
Other assets (long-term rec.)
Total assets
Irwin/McGraw-Hill
$
$
295 $
36,132
20,138
12,655
1,645
2,266
1,636
74,767
29,754
2,663
107,184 $
Dec. 27,
1997
13
38,011
16,483
13,675
4,344
2,266
1,598
76,390
28,781
2,742
107,913
Changes
282
(1,879)
3,655
(1,020)
(2,699)
38
973
(79)
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
In Thousands
March 28,
1998
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Accounts Payable
$
7,925 $
Bank line of credit
1,517
Accrued expenses
10,913
Total current liabilities
20,355
LT debt, less current maturities
10,000
Long-term deferred taxes
789
Stockholders' Equity:
Class A Com Stk, $.01 par
164
Class B Com Stk, $.01 par
41
Additional paid-in capital
56,188
Retained earnings
19,647
Total stockholders' equity
76,040
Total liabs & stockholders' equity
107,184
Irwin/McGraw-Hill
Dec. 27,
1997
Changes
9,556
13,770
23,326
10,000
789
(1,631)
1,517
(2,857)
163
41
56,023
17,571
73,798
107,913
1
165
2,076
-
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adj. to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
1,225
Stock option compensation expense
59
Loss on write-down of equity securities
2,317
Now,
Now,make
makeadjustments
adjustmentsfor
forchanges
changesin
incurrent
currentassets
assets
and
andcurrent
currentliabilities
liabilitiesusing
usingthe
thedecision
decisiontable
tablebelow.
below.
Change in Account Balance During Year
Increase
Decrease
Current
Subtract from net
Add to net income.
Net cash
provided
by
(used
in)
operating
activities
Assets
income.
Current
Add to net income.
Subtract from net
Liabilities
income.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adj. to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
1,225
Stock
option
compensation
expense
59
Subtract
the
$3,655
increase
in
Accounts
Receivable.
Subtract
the
$3,655
increase
in
Accounts
Receivable.
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Change in Account Balance During Year
Increase
Decrease
Current
Subtract from net
Add to net income.
Net cash
provided
by
(used
in)
operating
activities
Assets
income.
Current
Add to net income.
Subtract from net
Liabilities
income.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adj. to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
1,225
Stock
option
compensation
expense in Inventory. 59
Add
the
$1,020
decrease
Add
the
$1,020
decrease
in Inventory.2,317
Loss on write-down of equity securities
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Change in Account Balance During Year
Increase
Decrease
Current
Subtract from net
Add to net income.
Net cash
provided
by
(used
in)
operating
activities
Assets
income.
Current
Add to net income.
Subtract from net
Liabilities
income.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Change in
Account Balance During Year
Cash flows from operating
activities:
Increase
Decrease $2,076
Net income
Adj.
to reconcile
net income
net cashAdd to net income.
Current
Subtract
fromtonet
provided by operating
activities:
Assets
income.
Depreciation
1,225
Current
Addand
to amortization
net income.
Subtract from net
Stock option compensation expense
59
Liabilities
income.
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Add
Addthe
the$2,699
$2,699decrease
decreasein
inPrepaid
PrepaidExpenses.
Expenses.
Net cash provided by (used in) operating activities
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Change in
Account Balance During Year
Cash flows from operating
activities:
Increase
Decrease $2,076
Net income
Adj.
to reconcile
net income
net cashAdd to net income.
Current
Subtract
fromtonet
provided by operating
activities:
Assets
income.
Depreciation
1,225
Current
Addand
to amortization
net income.
Subtract from net
Stock option compensation expense
59
Liabilities
income.
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Other current assets
(38)
Subtract
Subtractthe
the$38
$38increase
increasein
inOther
OtherCurrent
CurrentAssets.
Assets.
Net cash provided by (used in) operating activities
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Change in
Account Balance During Year
Cash flows from operating
activities:
Increase
Decrease $2,076
Net income
Adj.
to reconcile
net income
net cashAdd to net income.
Current
Subtract
fromtonet
provided by operating
activities:
Assets
income.
Depreciation
1,225
Current
Addand
to amortization
net income.
Subtract from net
Stock option compensation expense
59
Liabilities
income.
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Other current assets
(38)
Other assets (long-term receivables)
79
Net cash provided by (used in) operating activities
Add
Addthe
the$79
$79decrease
decreasein
inthe
thecurrent
currentportion
portionof
ofOther
Other
Assets.
Assets.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Change in
Account Balance During Year
Cash flows from operating
activities:
Increase
Decrease $2,076
Net income
Adj.
to reconcile
net income
net cashAdd to net income.
Current
Subtract
fromtonet
provided by operating
activities:
Assets
income.
Depreciation
1,225
Current
Addand
to amortization
net income.
Subtract from net
Stock option compensation expense
59
Liabilities
income.
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Other current assets
(38)
Other assets (long-term receivables)
79
Accounts payable
(1,631)
Accrued expenses
(2,857)
Net cash provided by (used in) operating activities
1,294
Subtract
Subtractthe
the$1,631
$1,631decrease
decreasein
inthe
theAccounts
AccountsPayable
Payable
and
andthe
the$2,857
$2,857decrease
decreasein
inAccrued
AccruedExpenses.
Expenses.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Cash flows from operating activities:
Net income
$2,076
Adj. to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
1,225
Stock option compensation expense
59
Loss on write-down of equity securities
2,317
Changes in assets and liabilities:
Accounts receivable (net)
(3,655)
Inventory
1,020
Prepaid expenses
2,699
Other current assets
(38)
Other assets (long-term receivables)
79
Accounts payable
(1,631)
Accrued expenses
(2,857)
Net cash provided by (used in) operating activities
1,294
Statement continued . . .
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
The
Thebalance
balancesheet
sheetindicates
indicatesthat
thatEquipment
Equipment
increased
increasedby
by$973
$973during
duringthe
thequarter.
quarter.
IfIf you
youhad
hadaccess
accessto
toadditional
additionalcompany
company
information,
information,you
youwould
woulddiscover
discoverthat
thatthe
the
company
companypurchased
purchased$2,198
$2,198of
ofnew
new
equipment.
equipment. This
Thisis
isoffset
offsetby
by$1,225
$1,225in
in
depreciation
depreciationexpense
expense(see
(seethe
theCash
CashFlows
Flows
from
fromOperating
OperatingActivities).
Activities).
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
Purchases of short-term investments
(438)
Short-term
Short-terminvestments
investmentsdecreased
decreasedby
byaanet
net
$1,879
$1,879during
duringthe
thequarter.
quarter.
$2,317
$2,317of
ofthe
thechange
changewas
wasincluded
includedin
inthe
the
Cash
CashFlows
Flowsfrom
fromOperating
OperatingActivities
Activitiesas
asaa
write-down
write-downof
ofthe
theinvestment.
investment. The
Theremaining
remaining
$438
$438is
isthe
theamount
amountof
ofthe
thenew
new investments
investments
purchased
purchasedduring
duringthe
thequarter.
quarter.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
Purchases of short-term investments
(438)
Net cash used in investing activities
(2,636)
Cash flows from financing activities:
Proceeds from sale of shares
107
Class
ClassAACommon
CommonStock
Stockand
andAdditional
AdditionalPaid-in
Paid-inCapital
Capital
increased
increasedby
byaanet
net$166.
$166. $59
$59of
ofthat
thatamount
amountwas
was
noncash
noncashcompensation
compensationexpense.
expense. The
Theremaining
remaining$107
$107
represents
representsproceeds
proceedsfrom
fromsale
saleof
ofnew
new shares.
shares.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
Purchases of short-term investments
(438)
Net cash used in investing activities
(2,636)
Cash flows from financing activities:
Proceeds from sale of shares
107
Net borrowing under line of credit
1,517
$1,517
$1,517was
wasborrowed
borrowedagainst
againstaaline
lineof
ofcredit
creditduring
duringthe
the
period.
period.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
Purchases of short-term investments
(438)
Net cash used in investing activities
(2,636)
Cash flows from financing activities:
Proceeds from sale of shares
107
Net borrowing under line of credit
1,517
Net cash provided by financing activities
1,624
Net increase (decrease) in cash & cash equivalents
282
Cash & cash equivalents at beginning of period
13
Cash & cash equivalents at end of period
$295
Now
Nowwe
wecan
canreconcile
reconcilethe
thechange
changein
incash
cashto
tothe
theending
ending
cash
cashbalance
balancethat
thatappears
appearson
onthe
theBalance
BalanceSheet.
Sheet.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
THE BOSTON BEER COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
March 28,
In thousands for quarter ended
1998
Net cash provided by (used in) operating activities
1,294
Cash flows for investing activities:
Purchases of fixed assets
(2,198)
Purchases of short-term investments
(438)
Net cash used in investing activities
(2,636)
Cash flows from financing activities:
Proceeds from sale of shares
107
Net borrowing under line of credit
1,517
Net cash provided by financing activities
1,624
Net increase (decrease) in cash & cash equivalents
282
Specific
Supplemental
Information
must
be
provided
Cash & cash
equivalents at beginning
of period must be provided
13
Specific
Supplemental
Information
Cash & cash
equivalents
at end of period
when
the indirect
method is used. $295
when the indirect method is used.
Supplemental disclosure of cash flow information:
Interest paid
Income taxes paid
Irwin/McGraw-Hill
193
47
© The McGraw-Hill Companies, Inc., 2001
A Comparison of the Direct and
Indirect Methods
••
••
Net
Net cash
cash flow
flow is
is the
the same
same for
for both
both methods.
methods.
The
The direct
direct method
method provides
provides more
more detail
detail about
about
cash
cash from
from operating
operating activities.
activities.
•• The
The investing
investing and
and financing
financing sections
sections for
for the
the
two
two methods
methods are
are identical.
identical.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001
End of Chapter 13
Chester, ol’
buddy, I wonder if
you could help
me with a little
cash flow
problem I’m
having?
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 2001