“How Well Am I Doing?”
Statement of Cash Flows
（现金流量表）
Chapter Fifteen
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-2
Purpose of the Statement of Cash Flows
（现金流列表的目的）
Are cash flows
sufficient to
support ongoing
operations （当前
的经营）?
Will the company
have to borrow
money to make
needed investments
（投资）?
McGraw-Hill/Irwin
Can we meet
our obligations
（债务） to
creditors?
Why is there a
difference
between net
income （净利
润）and net
cash flow （净
现金流）?
Can we pay
dividends（股
利）?
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-3
Learning Objective 1
Classify changes in
noncash balance
sheet accounts as
sources or uses of
cash.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-4
Cash （现金）
The term cash on the statement of cash
flows refers broadly to both currency and
cash equivalents （货币和现金等价物）.
Currency and
Bank Accounts
T-bills
Cash
Money Market
Funds
McGraw-Hill/Irwin
Commercial
Paper
Copyright © 2008, The McGraw-Hill Companies, Inc.
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
（使用非现金的资产负债帐户来编制现金流量表）
15-5
Changes in
Capital Stock
Changes in
Liabilities
（股东权益）
（负债）
Dividends
Paid to
Stockholder
（股利）
Net Cash
Flows for a
Period
Changes in
Noncash
Assets
（非现金资产）
Net Income
（净利润）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-6
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
Net Income（净利润）
Net Loss（净损失）
Changes in noncash assets
Changes in liabilities*
Changes in capital stock
accounts
Dividends paid to stockholders
Sources
Always
Decreases
Increases
Increases
Uses
Always
Increases
Decreases
Decreases
Always
* Contra assets follow the rules for liabilities.
资产抵消帐户的处理方式同负债帐户
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-7
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
Increases in noncash asset accounts imply uses of
cash.（非现金资产帐户的增加意味着现金的使用）.
Example: Inventory is sold on
account to a client. （赊销存货
给客户）.
It is implied that cash
was used to acquire the
inventory.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-8
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
Increases in liability accounts imply sources of cash.
（负债的减少意味着现金的来源）
Example: Inventory is
purchased on credit from a
supplier. （从供货商赊购存货）.
It is implied that an increase
in a payable has the effect
of increasing cash available
for other uses.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-9
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
Decreases in noncash assets accounts imply sources of cash.
（非现金资产帐户的减少意味着现金的来源）.
Example: Accounts receivable
decreases when a company pays its
bill. （当顾客支付帐单时公司的应收帐款
减少）.
When the customer pays the
bill, the company’s cash
increases.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-10
Constructing the Statement of Cash Flows Using Changes
in Noncash Balance Sheet Accounts
Decreases in liability accounts imply uses of cash.
（负债的减少意味着现金的使用）.
Example: A company pays a
note payable held by a creditor.
（公司偿还债权人持有的应付票
据）.
When the payment is made,
cash decreases.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-11
A Simplified Statement of Cash Flows: An Example
Ed's Pizza Hut
Comparative Balance Sheet Account Balances
Cash
Accounts Receivable
Inventory
Land
Equipment
Accumulated Depr.
Accounts Payable
Salaries Payable
Note Payable - Joe Doe
Common Stock
Retained Earnings
McGraw-Hill/Irwin
3/31/2008 3/31/2007
Change
DR (CR)
DR (CR) Incr. (Decr.)
$ 71,000 $ 90,000 $ (19,000)
23,000
40,000
(17,000)
350,000
300,000
50,000
68,000
100,000
(32,000)
84,000
84,000
(45,000)
(39,000)
6,000
(38,000)
(27,000)
11,000
(9,000)
(14,000)
(5,000)
(50,000)
(50,000)
(500,000) (450,000)
50,000
(4,000)
(34,000)
(30,000)
$
- $
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-12
A Simplified Statement of Cash Flows: An Example
Additional Information:
 There was a net loss for the year of $27,000.
 Depreciation charges （折旧费用） for the year were $6,000.
 During the year, Ed sold land originally costing $32,000 for
$32,000.
 During the year, Ed paid dividends （股利）of $3,000 to the
stockholders （股东）.
 Ed issued $50,000 of common stock to settle the note due to
Joe Doe. （Ed 发行了50，000的普通股，偿还对Joe Doe的到
期票据）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-13
A Simplified Statement of Cash Flows: An Example
Here is a summary of the sources
of cash for Ed’s Pizza Hut.
Ed's Pizza Hut
Sources of Cash
Decrease in A/R
$
Decrease in Land
Increase in A/P
Depreciation charges
Total sources of cash
$
17,000
32,000
11,000
6,000
66,000
A/R：应收帐款 A/P：应付专款
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-14
A Simplified Statement of Cash Flows: An Example
Here is a summary of the uses of
cash for Ed’s Pizza Hut.
Ed's Pizza Hut
Uses of Cash
Net loss
$
27,000
Increase in Inventory （存货）
50,000
Increase in Salaries Payable （应付工资）5,000
Dividends paid
3,000
Total uses of cash
$
85,000
The net cash flow （净现金流） for Ed’s Pizza Hut is
($19,000): $66,000 in sources minus $85,000 in uses.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-15
A Simplified Statement of Cash Flows
Ed's Pizza Hut
Sources of Cash
Decrease in A/R
$
Decrease in Land
Increase in A/P
Depreciation charges
Total sources of cash
$
17,000
32,000
11,000
6,000
66,000
Ed's Pizza Hut
Uses of Cash
Net loss
Increase in Inventory
Increase in Salaries Payable
Dividends paid
Total uses of cash
McGraw-Hill/Irwin
$
$
27,000
50,000
5,000
3,000
85,000
This simplified
approach does
not follow the
format required
for external
reporting
purposes. It is
for illustrative
purposes only.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-16
Learning Objective 2
Classify transactions
as operating,
investing, or
financing activities.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-17
The Full-Fledged Statement of Cash Flows:
Operating Activities （经营活动）
Operating activities are those
activities that enter into the
determination of net income.
（经营活动指那些决定净收益的活动）
Transactions
affecting current
assets
（影响流动资产的
交易）
Transactions
affecting current
liabilities
Changes in
noncurrent
balance sheet
accounts that
directly affect net
income （直接影响
净收益的资产负债表的
非流动性项目）
（影响流动负债的
交易）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-18
The Full-Fledged Statement of Cash Flows:
Investing Activities （投资活动）
Investing activities relate to
transactions involving the acquiring or
disposing of noncurrent assets. （投资
活动与非流动资产的购买和处置的交易相
关）
Acquiring or
selling property,
plant and
equipment
（购买或出售财产、
厂房和设备）
Acquiring or
selling securities
Lending money to
another entity and
subsequently
collecting on the
loan（债款予另一主
体及随后贷款的回收）
（购买或出售证券
投资）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
The Full-Fledged Statement of Cash Flows:
Financing Activities （筹资活动）
15-19
Financing activities relate to transactions
involving borrowing from creditors or
repaying creditors and engaging in
transactions with the
company’s owners.
（筹资活动指向债权人借取和偿还资金以及于
所有者之间的交易）
Issuing stock and
purchasing
treasury stock
（发行新股和回购库
存股票）
McGraw-Hill/Irwin
Issuing long-term
debt and
repayment of debt.
（发行和偿还长期借
款）
Payment of
dividends (note that
interest on debt is
classified as an
operating activity)
（支付股利—注意：借
款利息被归为经营活动
）
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-20
The Full-Fledged Statement of Cash Flows: An
Overview
Operating Activities:
Net income
Changes in current assets
Changes in noncurrent assets that affect net income (e.g., depreciation)
Changes in current liabilities (except for debts to lenders and dividends
payable)
Changes in noncurrent liabilities that affect net income
Investing Activities:
Changes in noncurrent assets that are not included in net income
Financing Activities:
Changes in the current liabilities that are debts to lenders rather than
obligations to suppliers, employees, or the government
Changes in noncurrent liabilities that are not included in net income
Changes in capital stock accounts
Dividends
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-21
The Full-Fledged Statement of Cash Flows: An
Overview
Operating Activities
Investing Activities
Financing Activities
Reconciliation of the beginning
cash balance with the ending
cash balance（财务报告要求将期
初现金余额协调到期末余额）.
Noncash Investing
and Financing
Activities
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-22
Operating Activities
Net Income (Loss)
$ XXX
Add:
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
$ XXX
Decr. in Current Noncash Assets
Incr. in Current Liabilities
Depreciation Charges
Losses
Less:
Incr. in Current Noncash Assets
Decr. in Current Liabilities
Gains
Net Cash Flows from Operating Activities
McGraw-Hill/Irwin
Includes those activities that enter into the
determination of net income.
（包括那些决定净利润的活动）
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-23
Operating Activities
Sources of cash are added to net income and uses of cash
are subtracted from net income. （现金的来源被加回净利
润，而现金的使用从净利润中减去）.
Impact on Net Income
Sources
Uses
Current
Noncash Assets
Current
Liabilities
McGraw-Hill/Irwin
Decreases
Increases
Increases
Decreases
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-24
Operating Activities
Net Income (Loss)
$ XXX
Add:
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
$ XXX
Decr. in Current Noncash Assets
Incr. in Current Liabilities
Depreciation Charges
Losses
Less:
Incr. in Current Noncash Assets
Decr. in Current Liabilities
Gains
Net Cash Flows from Operating Activities
Impact on Net Income
Sources
Uses
Current
Noncash Assets
Current
Liabilities
McGraw-Hill/Irwin
Decreases
Increases
Increases
Decreases
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-25
Operating Activities
Net Income (Loss)
$ XXX
Add:
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
$ XXX
Decr. in Current Noncash Assets
Incr. in Current Liabilities
Depreciation Charges
Losses
Less:
Incr. in Current Noncash Assets
Decr. in Current Liabilities
Gains
Net Cash Flows from Operating Activities
Impact on Net Income
Sources
Uses
Current
Noncash Assets
Current
Liabilities
McGraw-Hill/Irwin
Decreases
Increases
Increases
Decreases
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-26
Operating Activities
Net Income (Loss)
$ XXX
Add:
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
$ XXX
Decr. in Current Noncash Assets
Incr. in Current Liabilities
Depreciation Charges
Losses
Less:
Incr. in Current Noncash Assets
Decr. in Current Liabilities
Gains
Net Cash Flows from Operating Activities
Depreciation and Amortization charges are added back to net
income because they are decreases in noncash assets. （折旧和
摊消费用被加回净利润因为它减少了非现金资产）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-27
Operating Activities
Net Income (Loss)
$ XXX
Add:
XXX
XXX
XXX
XXX
(XXX)
(XXX)
(XXX)
$ XXX
Decr. in Current Noncash Assets
Incr. in Current Liabilities
Depreciation Charges
Losses
Less:
Incr. in Current Noncash Assets
Decr. in Current Liabilities
Gains
Net Cash Flows from Operating Activities
Gains are subtracted
from net income. （利得
从净收益中减去）
McGraw-Hill/Irwin
Losses are added back
to net income. （亏损加
回至净利润）.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-28
Investing Activities
Proceeds （收入）from sale of land,
buildings, equipment, or other
noncurrent assets
$ XXX
Receipt of principal from
investments （收回投资本金）
XXX
Less:
Payments to acquire land,
buildings, equipment, or other
noncurrent assets
(XXX)
Payments to acquire
investments
(XXX)
Net Cash Flows from Investing Activities
$ XXX
Add:
Includes transactions that involve the acquisition or
disposal of noncurrent assets.
McGraw-Hill/Irwin
包括那些有关获得和处置非流动资产的交易
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-29
Financing Activities
Add:
Proceeds from borrowings
$ XXX
Proceeds from issuing capital
stock (发行股票和借款的收入）
XXX
Proceeds from sale of bonds
XXX
Less:
Principal payments on
borrowed funds
(XXX)
Payments related to bond （偿还到期债券）
maturities
(XXX)
Dividend payments
(XXX)
Net Cash Flows from Financing Activities
$ XXX
Includes transactions involving receipts from or payments
to creditors and owners.
(与债权人和股东之间的资金往来）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-30
Other Issues: Gross or Net? （总额或净额的概念）
For investing and
financing activities,
items on the
statement of cash
flows should be
presented in gross
amounts rather than
in net amounts. （现
金流量表上筹资和投资活
动的现金流量应以总金额
而不是净金额呈报）
McGraw-Hill/Irwin
Example:
 Assume Macy’s
purchases $50 million
in property during the
year and sells other
property for $30
million.
 Instead of showing
the net change of $20
million, the company
must report the gross
amounts of both
transactions.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-31
Other Issues: Direct Method or Indirect Method?
（直接法或间接法）
Two Formats for Reporting Operating Activities
Direct Method
Indirect Method
Reports the
cash effects of
each operating
activity
Starts with accrual
net income and
converts to cash
basis（从应计制的
净利润开始向现金制
转换）
No matter which format is used, the same amount of net cash flows
from operating activities is generated.
McGraw-Hill/Irwin
无论哪种方法被采用， 经营活动有因该得到相同的现金流
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-32
Learning Objective 3
Prepare a statement
of cash flows using
the indirect method to
determine the net
cash provided by
operating activities.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-33
A Full-Fledged Statement of Cash Flows:
An Example
Ed's Pizza Hut
Comparative Balance Sheet Account Balances
Cash
Accounts Receivable
Inventory
Land
Equipment
Accumulated Depr.
Accounts Payable
Salaries Payable
Note Payable - Joe Doe
Common Stock
Retained Earnings
McGraw-Hill/Irwin
3/31/2008 3/31/2007
Change
DR (CR)
DR (CR) Incr. (Decr.)
$ 71,000 $ 90,000 $ (19,000)
23,000
40,000
(17,000)
350,000
300,000
50,000
68,000
100,000
(32,000)
84,000
84,000
(45,000)
(39,000)
6,000
(38,000)
(27,000)
11,000
(9,000)
(14,000)
(5,000)
(50,000)
(50,000)
(500,000) (450,000)
50,000
(4,000)
(34,000)
(30,000)
$
- $
-
Let’s revisit the
comparative
balance sheet
account balances
for Ed’s Pizza Hut.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-34
A Full-Fledged Statement of Cash Flows:
An Example
Let’s also refresh our memory regarding the
following additional information.
Additional Information:
 There was a net loss for the year of $27,000.
 Depreciation charges for the year were $6,000.
 During the year, Ed sold land originally costing
$32,000 for $32,000.
 During the year, Ed paid dividends of $3,000 to
the stockholders.
 Ed issued $50,000 of common stock to settle the
note due to Joe Doe.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-35
Preparing the Statement of Cash Flows: Step 1
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
Adjusted
Effect
Classification
List each account
appearing on the
comparative balance
sheets except for cash
and cash equivalents
and retained earnings.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-36
Preparing the Statement of Cash Flows: Step 2
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
$
Adjusted
Effect
Classification
(17,000)
50,000
(32,000)
-
6,000
11,000
(5,000)
(50,000)
Compute the change
from the beginning
balance to the ending
balance for each
account.
50,000
(27,000)
3,000
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-37
Preparing the Statement of Cash Flows: Step 3
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
$
Adjusted
Effect
Classification
(17,000) Source
50,000
Use
Code each entry on
the worksheet as a
source or use of
cash.
(32,000) Source
-
6,000
Source
11,000 Source
(5,000)
Use
(50,000)
Use
50,000
Source
(27,000)
3,000
Use
Use
{
Recall that the transaction
involving the Notes Payable and
Common Stock was noncash.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-38
Preparing the Statement of Cash Flows: Step 4
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
$
(17,000) Source
50,000
Use
$
(32,000) Source
-
6,000
Classification
17,000
(50,000)
32,000
-
Source
6,000
11,000 Source
(5,000)
Use
11,000
(5,000)
(50,000)
Use
(50,000)
50,000
Source
50,000
(27,000)
3,000
Use
Use
(27,000)
(3,000)
(19,000)
$
Adjusted
Effect
Code sources
of cash as
positive
numbers and
uses of cash
as negative
numbers.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-39
Preparing the Statement of Cash Flows: Step 5
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
$
(17,000) Source
50,000
Use
$
Adjusted
Effect
17,000
(50,000)
-
32,000
-
-
32,000
-
Source
6,000
-
6,000
11,000 Source
(5,000)
Use
11,000
(5,000)
-
11,000
(5,000)
(50,000)
Use
(50,000)
50,000
50,000
Source
50,000
(50,000)
(27,000)
3,000
Use
Use
(32,000) Source
-
6,000
$
(27,000)
(3,000)
(19,000) $
-
$
17,000
(50,000)
{
Make any
necessary
adjustments,
including
adjustments
for gains and
losses. The
net effect of
these should
equal zero.
Classification
-
We need to make an adjustment
for
- the noncash transaction
relating to Notes Payable and
(27,000) Common Stock.
$
(3,000)
(19,000)
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-40
Preparing the Statement of Cash Flows: Step 6
Ed's Pizza Hut
Statement of Cash Flows Worksheet
Source Cash Flow
AdjustChange
or Use?
Effect
ments
Assets (except cash and
Current assets
Accounts receivable
Inventory
Noncurrent assets
Land
Equipment
Contra Assets, Liabilities,
Contra assets
Accumulated depreciation
Current liabilities
Accounts payable
Salaries payable
Noncurrent liabilities
Notes payable
Stockholders' equity
Common stock
Retained earnings
Net loss
Dividends
Total (net cash flow)
McGraw-Hill/Irwin
$
(17,000) Source
50,000
Use
$
17,000
(50,000)
-
32,000
-
Source
Adjusted
Effect
17,000
(50,000)
Operating
Operating
-
32,000
-
Investing
6,000
-
6,000
Operating
11,000 Source
(5,000)
Use
11,000
(5,000)
-
11,000
(5,000)
Operating
Operating
(50,000)
Use
(50,000)
50,000
-
50,000
Source
50,000
(50,000)
-
(27,000)
3,000
Use
Use
-
(27,000)
(3,000)
(19,000)
(32,000) Source
-
6,000
$
(27,000)
(3,000)
(19,000) $
$
Classification
$
Classify
each
entry as
operating,
investing
or
financing
activity.
Operating
Financing
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-41
Preparing the Statement of Cash Flows:
Step 7
Ed's Pizza Hut
Statement of Cash Flows
For the Period Ending 3/31/2008
Operating Activities
Net Loss
$
Add: Decrease in A/R
Increase in A/P
Increase in Depr. Charges
Less: Increase in Inventory
Decrease in Salaries Payable
Net Cash Flow from Operations
Investing Activities
Proceeds from sale of Land
Financing Activities
Dividends paid
Net change in cash
McGraw-Hill/Irwin
(27,000)
17,000
11,000
6,000
(50,000)
(5,000)
(48,000)
32,000
Copy the data from
the worksheet into
the Statement of
Cash Flows section
by section.
(3,000)
(19,000)
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-42
Preparing the Statement of Cash Flows:
Step 8
Ed's Pizza Hut
Statement of Cash Flows
For the Period Ending 3/31/2008
Operating Activities
Net Loss
$
Add: Decrease in A/R
Increase in A/P
Increase in Depr. Charges
Less: Increase in Inventory
Decrease in Salaries Payable
Net Cash Flow from Operations
Investing Activities
Proceeds from sale of Land
Financing Activities
Dividends paid
Net change in cash
Cash, beginning
Cash, ending
$
McGraw-Hill/Irwin
(27,000)
17,000
11,000
6,000
(50,000)
(5,000)
(48,000)
Prepare a cash
reconciliation at the
bottom of the
statement.
32,000
(3,000)
(19,000)
90,000
71,000
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-43
Example – Indirect Method
Ed's Pizza Hut
Statement of Cash Flows
For the Period Ending 3/31/2008
Operating Activities
Net Loss
$
Add: Decrease in A/R
Increase in A/P
Increase in Depr. Charges
Less: Increase in Inventory
Decrease in Salaries Payable
Net Cash Flow from Operations
Investing Activities
Proceeds from sale of Land
Financing Activities
Dividends paid
Net change in cash
Cash, beginning
Cash, ending
$
McGraw-Hill/Irwin
(27,000)
17,000
11,000
6,000
(50,000)
(5,000)
(48,000)
32,000
(3,000)
(19,000)
90,000
71,000
In addition, on the
face of the statement
or in a supplemental
schedule, disclose
the issuance of
$50,000 of stock to a
creditor, a noncash
financing activity.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-44
Interpretation of the Statement of Cash Flows
Examine the operating activities section
carefully.
 Ed’s Pizza Hut generated a negative cash flow
from operations of $48,000. This is usually a
sign of fundamental difficulties.（经营现金流量
为负，表明面临财务困难）
 Ultimately, a positive cash flow is necessary to
avoid liquidating assets or borrowing money to
pay for day-to-day activities. （总之，为避免清
算或借钱支付每天的各项活动，持有正现金流量
是有必要的.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
The Direct Method of
Determining the Net Cash
Provided by Operating
Activities
Appendix 15A
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-46
Learning Objective 4
Use the direct method
to determine the net
cash provided by
operating activities.
(Appendix 15A)
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-47
Computing Net Cash Provided by Operating
Activities
The direct method computes net
cash provided by operating activities
by reconstructing the income
statement on a cash basis from top
to bottom. （直接法通过在现金制的基
础上重组利润表来计算经营活动现金流
量）.
Cash provided by operating activities under
the direct method will always agree with the
amount computed using the indirect method.
（直接法和间接法计算的经营现金流量永远相等）
.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-48
Similarities and Differences in Handling Data
Revenue or Expense Item
Sales revenue (as reported)
Adjustments to a cash basis:
Increases in accounts receivable
Decreases in accounts receivable
Cost of goods sold (as reported)
Adjustments to a cash basis:
Increase in merchandise inventory
Decrease in merchandise inventory
Increase in accounts payable
Decrease in accounts payable
Operating expenses (as reported)
Adjustments to a cash basis:
Increase in prepaid expenses
Decrease in prepaid expenses
Increase in accrued liabilities
Decrease in accrued liabilities
Period's depreciation, depletion and
amortization charges
Income tax expense (as reported)
Adjustments to a cash basis:
Increase in accrued taxes payable
Decrease in accrued taxes payable
Increase in deferred income taxes
Decrease in deferred income taxes
McGraw-Hill/Irwin
Add (+) or
Deduct (-) to
Adjust to a
Cash Basis
+
+
+
+
+
-
Adjustments for accounts that
affect revenue are the same in
the direct and indirect methods.
（对影响收入的金额的调整在直接
和间接下相同）
Adjustments for accounts that
affect expenses are handled in
opposite ways for the direct and
indirect methods. （对影响费用
的金额的调整在直接和间接法下相
反）
+
+
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-49
Direct Method: Gains and Losses
Under the direct method, no
adjustments for gains and
losses on the sale of assets
are needed.
（在直接法下资产出售的损溢不
需调整）
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-50
The Direct Method: An Example
Ed's Pizza Hut
Comparative Balance Sheet Account Balances
Cash
Accounts Receivable
Inventory
Land
Equipment
Accumulated Depr.
Accounts Payable
Salaries Payable
Note Payable - Joe Doe
Common Stock
Retained Earnings
McGraw-Hill/Irwin
3/31/2008 3/31/2007
Change
DR (CR)
DR (CR) Incr. (Decr.)
$ 71,000 $ 90,000 $ (19,000)
23,000
40,000
(17,000)
350,000
300,000
50,000
68,000
100,000
(32,000)
84,000
84,000
(45,000)
(39,000)
6,000
(38,000)
(27,000)
11,000
(9,000)
(14,000)
(5,000)
(50,000)
(50,000)
(500,000) (450,000)
50,000
(4,000)
(34,000)
(30,000)
$
- $
-
Let’s revisit the
comparative
balance sheet
account balances
（比较资产负债表）
for Ed’s Pizza Hut.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-51
The Direct Method: An Example
Ed's Pizza Hut
Income Statement
For the Year Ended 3/31/2008
Sales （销售收入）
$
1,000,000
Cost of goods sold （销售成本）
750,000
Gross m argin （毛利）
250,000
Operating expenses （经营费用）
277,000
Net loss （净损失）
$
(27,000)
Let’s assume that Ed’s Pizza Hut
prepared this income statement.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-52
The Direct Method: An Example
Step 1: Translate sales revenue into cash
collected from customers.
Sales (as reported)
Add: Decrease in accounts receivable
Cash collected from customers
McGraw-Hill/Irwin
$
$
1,000,000
17,000
1,017,000
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-53
The Direct Method: An Example
Step 2: Translate cost of goods sold into
cash disbursements for purchases.
Cost of goods sold (as reported)
$
Add: Increase in inventory
Less: Increase in accounts payable
Cash paid for purchases
$
McGraw-Hill/Irwin
750,000
50,000
(11,000)
789,000
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-54
The Direct Method: An Example
Step 3: Translate operating expenses into
cash paid for operating expenses.
Operating expenses (as reported)
Add: Decrease in salaries payable
Less: Increase in depreciation
Cash paid for operating expenses
$
$
277,000
5,000
(6,000)
276,000
No adjustment for income taxes （所得税
） is required because Ed’s Pizza Hut has
a net loss of $27,000.
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-55
The Direct Method: An Example
Ed's Pizza Hut
Statement of Cash Flows
For the Period Ending 3/31/2008
Operating Activities
Cash received from customers
$ 1,017,000
Cash paid for purchases
(789,000)
Cash paid for operating expenses
(276,000)
Net Cash Flow from Operations
(48,000)
Investing Activities
Proceeds from sale of land
32,000
Financing Activities
Dividends paid
(3,000)
Net change in cash
(19,000)
Cash, beginning
90,000
Cash, ending
$
71,000
McGraw-Hill/Irwin
Notice that the
net cash
provided by
operating
activities agrees
with that
computed using
the indirect
method.
Copyright © 2008, The McGraw-Hill Companies, Inc.
15-56
End of Chapter 15
McGraw-Hill/Irwin
Copyright © 2008, The McGraw-Hill Companies, Inc.