Sample Statement of Cash Flows
Cash Flow from Operations
Net profit after taxes
+Depreciation
+Decrease in accounts receivable
+Decrease in inventories
+Increase in accounts payable
+Decrease in accruals
Cash provided by operations
Cash Flow from Investments
Increase in fixed assets
Change in business ownership
Cash provided by investment activities
Cash Flow from Financing
+Decrease in notes payable
+Increase in long-term debt
+Changes in stockholders’ equity
-Dividends paid
Cash provided by financing activities
Net increase/decrease in cash and marketable securities
The Statement of Cash Flows on page presents how changes in Balance Sheet accounts will affect a company’s cash balance. Refer to that information and discuss how an increase in your company's accounts payable from one period to the next is a means to maintain high cash balances in your company’s bank account. Do you believe there are any ethical considerations in slowing payments to your suppliers for the sake of increasing your company's bank balances?