Assignment: Interpret the Components of a Cash-Flow Statement to Describe the Liquidity of an Organization
Scenario
You presently work for Ford Motor Company in the Accounting and Reporting department. As part of the annual requirements of a publicly traded company, an external auditing firm just completed the required audit on Ford's financial statements. The auditing firm determined the internal control procedures Ford developed were sufficient but noted Ford Motor Company could have benefited from more detailed written procedures in preparing the statement of cash flows. You have been assigned the task of analyzing procedures for developing the statement of cash flows.
Instructions
Write an operational procedure to explain the process staff should follow to develop the different sections of the statement of cash flows using the indirect method. Use the 2018 Statement of Cash Flows for Ford Motor Company and include the following:
In the procedures:
1. Define the components of the operating section of the statement of cash flows and which accounts an employee should evaluate to develop this section.
2. Define the components of the financing section of the statement of cash flows and which accounts an employee should evaluate to develop this section.
3. Define the components of the investing section of the statement of cash flows and which accounts an employee should evaluate to develop this section.
4. Explain what non-cash items must be disclosed on the statement of cash flows.
5. Comment on the cash generated from operations versus other activities and why this is important to evaluating liquidity.
Format your assignment according to the give formatting requirements:
1. The answer must be double spaced, typed, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the course title, the student's name, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The references and Citations should follow APA format. The reference page is not included in the required page length.