Upgrade to remove ads
Only $2.99/month

ch 14

Terms in this set (9)

cash equivalents
short-term, highly liquid investments such as Treasury bills, commercial paper, and money market funds, that are made solely for the purpose of generating a return on temporarily idle funds
direct method
a method of computing the net cash provided by operating activities in which the income statement is reconstructed on a cash basis from top to bottom
financing activities
these activities generate cash inflows and outflows related to borrowing from and repaying principal to creditors and completing transactions with the companys owners, such as selling or repurchasing shares of common stock and paying dividends
free cash flow
a measure that assesses a companys ability to fund its capital expenditures and dividends from its net cash provided by operating activities
indirect method
a method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis
investing activities
these activities generate cash inflows and outflows related to acquiring or disposing of noncurrent assets such as property, plant, and equipment, long-term investments, and loans to another entity
net cash provided by operating activities
the net result of the cash inflows and outflows arising from day-to-day operations
operating activities
these activities generate cash inflows and outflows related to revenue and expense transactions that affect net income
statement of cash flows
a financial statement that highlights the major activities that impact cash flows and, hence, affect the overall cash balance
YOU MIGHT ALSO LIKE...