Exam 3: Income Flows Versus Cash Flows: Key Relationships in the Dynamics of a Business

Cash flow from operations should include none of the cash flows associated with marketable securities if such transactions are viewed as ___________________________________.

EBITDA not only ignores four expenses but also ignores changes in __________________________________________________ accounts.

Listed below is a list of cash inflows and cash outflows for Toggle Inc. 1. Cash received from issuing debt 2. Cash received from interest earned on a bond investment 3. Cash used to purchase property 4. Cash used to repay debt 5. Cash received from collections of loans 6. Cash paid for retiring common stock 7. Cash paid to employees for salaries 8. Cash from the sale of marketable securities 9. Cash used to pay dividends 10. Cash from the sale of services to customers 11. Cash paid to government agencies for taxes 12. Cash received from the sale of equipment For each item indicate where it should appear on Toggle's statement of cash flows. Select from: a. Cash inflows from operating activities b. Cash outflows from operating activities c. Cash inflows from investing activities d. Cash outflows from investing activities e. Cash inflows from financing activities f. Cash outflows from financing activities

When preparing the statement of cash flows using the indirect method an increase in inventories would appear as

Under the ______________________________ of preparing the statement of cash flow's operating activities section firms list the cash flows from selling goods and services and then subtract the cash outflows to providers of goods and services.

Selected financial statement information for Filmco appears below: Calculate the amount of cash collected from customers and the amount of cash spent on inventory for 2006 by Filmco.

____________________ activities relate to transactions between the firm and its creditors and owners.

The expense incurred by issuing stock options should be

A company in the growth phase of its product life cycle will normally have the following pattern of cash flows

Normally, cash flows from investing activities will start providing cash during which phase of the product life cycle?

Olive Corporation manufactures food processing equipment. Use Olive Corporation's two most recent balance sheets and most recent income statement to prepare a statement of cash flows for 2006. The company paid dividends of $6,250 during 2006.

When preparing the statement of cash flows using the indirect method the payment of dividends would appear as

Discuss the correlations that have been found between net income, net income plus or minus Type 1 adjustments ( adjustments to net income for revenues, expenses, gains and losses that are recognized in income and are associated with changes in noncurrent assets, noncurrent liabilities, and shareholders' equity, but do not affect cash by the same amounts for the period), and cash flow from operations.

If a firm is growing and expanding its accounts receivable and inventories faster than its current operating liabilities its cash flow from operation will normally be

Cash collected from customers would appear in the operating activities section of a statement of cash flows prepared using the ____________________ method

Fizzzle Inc. sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale. How should this gain be treated when preparing the operating activities section of the statement of cash flows using the indirect method?

The period in which a firm commences the manufacture of its product to the time it receives cash is called the ______________________________.

In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from

____________________ activities relate to the acquisition and sale of noncurrent assets, particularly property, plant and equipment.

Which of the following is not an expense excluded when calculating EBITDA?