1. How do managers use the statement of cash flows?
2. Describe at least four needs for cash within a business.
3. Define an “operating activity.” List two examples of an operating activity on the statement of cash flows that would increase cash. List two examples of an operating activity that would decrease cash.
4. Define an “investing activity.” List two examples of an investing activity on the statement of cash flows that would increase cash. List two examples of an investing activity that would decrease cash.
5. Define a “financing activity.” List two examples of a financing activity on the statement of cash flows that would increase cash. List two examples of a financing activity that would decrease cash.
6. Define a “noncash investing or financing” activity. Describe an activity that would need to be disclosed as a noncash investing or financing activity.
7. Describe the difference between the direct and the indirect methods of preparing the operating section of the statement of cash flows.
8. Describe the process for reconciling net income to the cash basis. What items are added to net income? What items are subtracted from net income?
9. When preparing a statement of cash flows using the indirect method, what information is needed? What documents or statements would be used?
10. Summarize the process for preparing the operations section of the statement of cash flows when using the direct method.
11. Provide an example of an operating cash inflow that could result from sustainability activities. Also provide an example of an operating cash outflow that would support sustainability.
12. Think of a company with which you are familiar. Describe an investing activity related to a company’s sustainability efforts that would be classified as a use of cash on a company’s statement of cash flows. Describe a financing activity related to a company’s sustainability efforts that would be classified as a use of cash on a company’s statement of cash flows.