Homework: Financial Statement Analysis
I. Discuss the importance of the statement of cash flows as an analytical tool for users of financial statements.
II. Explain the meaning of the three categories of a statement of cash flows: operating, investing and financing activities. Give an example of an inflow and an outflow for each category.
III. Identify the following items as operating (O), investing (I), or financing (F) activities.
1) Property, plant and equipment
2) Current maturities of long-term debt
3) Inventories
4) Accounts receivable
5) Common stock
6) Short-term debt
7) Accounts payable
8) Net income
9) Accumulated depreciation
10) Dividends
IV. Explain how it is possible for a firm with a positive net profit to generate negative cash flow from operating activities.
Format your homework according to the following formatting requirements:
(1) The answer should be typed, double spaced, 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 homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.