Week14,15 : Funds Analysis, Cash-Flow Analysis, and Financial Planning

After studying Chapter 7, you should be able to:

l Explain the difference between the flow of funds (sources and uses of funds) statement and the statement of cash flows – and understand the benefits of using each.

l Define “funds,” and identify sources and uses of funds.

l Create a sources and uses of funds statement, make adjustments, and analyze the final results.

l Describe the purpose and content of the statement of cash flows as well as implications that can be drawn from it.

l Prepare a cash budget from forecasts of sales, receipts, and disbursements – and know why such a budget should be flexible.

l Develop forecasted balance sheets and income statements.

l Understand the importance of using probabilistic information in forecasting financial statements and evaluating a firm’s condition.

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chapter-7.pdf (0.20 MB )