cash flows from operating activities-indirect method

free cash flow

The amount of operating cash flow remaining after replacing current productive capacity and maintaining current dividends.

amortization of patent

added

decrease in merchandise inventory

added

decrease in notes receivable due in 60 days from customers

added

decrease in prepaid expenses

added

depreciation of fixed assets

added

direct method

A method of reporting the cash flows from operating activities as the difference between the operating cash receipts and the operating cash payments.

indirect method

A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.

statement of cash flows

A summary of the cash receipts and cash payments for a specific period of time, such as a month or a year.

cash flows from investing activities

The section of the statement of cash flows that reports cash flows from transactions affecting investments in noncurrent assets.

cash flows from financing activities

The section of the statement of cash flows that reports cash flows from transactions affecting the equity and debt of the business.

cash flow per share

The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.

cash flows from operating activities

The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.

increase in accounts payable

added

increase in notes payable due in 120 days to vendors

added

increase in salaries payable

added

loss on retirement of long-term debt

added

gain on disposal of fixed assets

deducted

increase in accounts receivable

deducted

increase in merchandise inventory

deducted

increase in prepaid expenses

deducted