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Chapter Summary

Section 16.1: Purpose​

  • Shows cash flows
  • Explains cash changes
  • Complements other statements

Section 16.2: Activity Classification​

  • Operating, investing, financing
  • Proper classification important

Section 16.3: Indirect Method​

  • Starts with net income
  • Adjusts for non-cash items
  • Adjusts for changes

Section 16.4: Complete Statement​

  • All three sections
  • Net change in cash
  • Beginning and ending balances

Section 16.5: Ratios​

  • Operating cash flow ratio
  • Free cash flow
  • Cash flow to debt

Section 16.6: Direct Method​

  • Actual cash receipts/payments
  • More detailed
  • Less common

Section 16.7: Requirements​

  • Size-based requirements
  • PCN format
  • RCS filing

Section 16.8: PCN Format​

  • PCN structure
  • Proper classifications
  • Compliance