1. Use the attached financial statements to calculate the company's free cash flow in 2019. Possible Answers: 14,921 10,086 6,606 8,130 2. Income Statement Revenues Cost of Goods Sold Gross Profit Depreciation Distribution Expenses Marketing and Administration SG&A EBIT (Operating Profit) Interest Income Before Taxes Taxes Net Income Balance Sheet ASSETS Current Assets: Cash Accounts Receivables Inventories Total Current Assets Non-Current Assets: Property Plant and Equipment TOTAL ASSETS LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payables Total Current Liabilities: Non-Current Liabilities: Long-Term Debt Shareholder's Equity: Common Stock Retained Earnings Total Shareholders' Equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY T 2018 81,422 38,121 43,301 2,960 5,884 23,507 1,764 9,186 1,073 8,113 2,761 5,352 2018 1,956 12,685 7,168 21,809 19,563 41,372 12,089 12,089 17,903 5,000 6,380 11,380 41,372 2019 87,698 36,756 50,942 2,373 5,921 27,169 2,931 12,548 1,102 11,446 2,429 9,017 2019 10,086 14,074 7,691 31,851 20,371 52.222 12,398 12,398 16,427 8,000 15,397 23,397 52,222 Use the attached financial statements to calculate the cash flows from investing activities in 2019. Possible Answers: -1,565 1,937 2,086 -3,181
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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