Cash Flow Statements???

[veditahjps]

hi guys,

can someone help me understand cash flow statement. Infact i just can't understand when to start with profit before interest and tax and why do we go abt adding non cash items such as depreciation etc.

HELLLLLLLLLPPPPPPP!!!!!!

[Acid]

Hi

Cash flow statements shows the cash flows i.e. cash inflows and cash outflows of a company. Now as its suggested that depreciation is a non cash expense i.e. it doesnt involve any outflow of cash flows so that so therefore not included in the cash flow statement.

Think of it this way.. You buy Honda Civic 2008 today for $100000 and after a year when you assess its market value then it comes out to be $50000. So although the value of the car has decreased you didnt had to pay any cash (you didnt pay $50000).

Cashflow statement is easy to understand and you must work through various examples and practice questions in the studytexts.

Best Wishes.

[veditahjps]

tnxs acid uv been of gr8 help as usual...

cheers

hema

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[Admin]

tnxs acid uv been of gr8 help as usual...

cheers

hema

Moderators notice:
Please use the THANKS button to thank members.

Hi Hema, Please type/talk normally and not in text language as we are a professional forum and would like to keep it as such. Many thanks.

[veditahjps]

will keep that in mind next time...sorry

[iffikhan]

Ethics are in F1 ! Lols

[prasanthi]

Dear Friend,

Cash flow statement means statement showing cash inflow and out flow. we took net profit of the company, to which we should add non cash items such as depreciation , amortisation, bad debts etc. So that we could get the exact net profit of the company, which includes only cash transactions. From this profit before operations we have to add the cash inflows and deduct cash out flows, then we will get the cash balance of the company.

hi guys,

can someone help me understand cash flow statement. Infact i just can't understand when to start with profit before interest and tax and why do we go abt adding non cash items such as depreciation etc.

HELLLLLLLLLPPPPPPP!!!!!!