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Ebook Financial & managerial accounting (16th edition): Part 2

(BQ) Part 2 book "Financial & managerial accounting" has contents: Statement of cash flows, statement of cash flows, global business and accounting, job order cost systems and overhead allocations, costing and the value chain, costing and the value chain, costing and the value chain,.and other contents. | Confirming Pages Free ebooks ==> www.ebook777.com CHA P TE R 13 © AP Photo/mark Lennihan AP Photo/mark Lennihan Photo/mark Lennihan Statement of Cash Flows Learning Objectives AF TER ST UDYING TH IS CHAPTER, YOU SHOULD BE ABLE TO: LO1 E Explain the purposes and uses of a statement of cash flows. LO2 Describe how cash transactions are classified in a statement of cash flows. LO3 Compute the major cash flows relating to operating activities. C LO4 Compute the cash flows relating to investing and financing activities. C LO5 Distinguish between the direct and indirect methods of reporting operating cash flows. LO6 Explain why net income differs from net cash flows from operating activities. E LO7 Compute net cash flows from operating activities using the indirect method. C LO8 Discuss the likely effects of various business strategies on cash flows. LO9 Explain how a worksheet may be helpful in preparing a statement of cash flows. E wil11048_ch13_562-619.indd 562 www.Ebook777.com 11/10/10 11:54 AM Confirming Pages Free ebooks ==> www.ebook777.com LOWE’S Cash is sometimes referred to as the “lifeblood” of a company, implying that companies require cash to be successful and to even continue to exist. Cash is required on a daily basis to meet current obligations and to position the company for future success. Cash requirements include activities as broad ranging as meeting payroll requirements for employees, purchasing inventory to meet the shopping needs of customers, repaying debt when it is due, paying dividends to stockholders, and from time to time expanding the business by acquiring plant assets or even entire other businesses. Cash flow is particularly important for large companies like Lowe’s as it continuously seeks to expand its markets. Lowe’s 2009 annual report includes three-year comparative statements of cash flows for 2009, 2008, and 2007. These statements are presented in three major categories: operating activities, investing .