I think this week was easier for me than others because of the simplicity behind the terms. The statements of cash flows include operating activities, investing activities and financing activities. Operating activities include cash flow from business operations, things like sales. Investing activities includes assets, and financing activities include stockholders equity. We learned about direct and indirect cash flows this week. Indirect cash flows are the most commonly used by business and consist of three major steps: (1) determine net cash, (2) figure changes in asset and liability accounts, and (3) compare the figures on the statement of cash flows to the balance sheet.
The second topic of this week was in regards to financial statement analysis. What this means is using financial statements in three different ways of comparison. The three ways are intracompany, industry and intercompany. The analysis of financial statements can be viewed horizontally, vertically or with ratios. Horizontally refers to over course of time, vertically refers to the change in figures, the difference between current and base amounts. The different ratios will help when determining a company’s profitability, liquidity and solvency.
This week was little easier for me than the previous weeks. Bonds have always been confusing to me, and I am still a little confused about them. It was interesting to me to learn about the different types of payroll deductions. I never actually knew what took place in payroll departments, so that cleared quite a bit for me. Another thing I never knew was what happened when you use a credit card at a store, now I know that the store records the transaction