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| Exercise 7.1 | Accounting Statement of Cash Flows |
IBM's Investment Guides provide an introduction to reading the financial statements in a company's annual report. Clicking on "Statement of Cash Flows," leads you to a good discussion of the Accounting Statement of Cash Flows prepared according to the Indirect Method. After reading this discussion, see what tips on using a cash flow statement you can pick up from a "business school dean" and a "business executive."
http://www.ibm.com/investor/tools/financials.phtml
http://www.ibm.com/investor/help/guide/investors-tips.wss#businessschooldean
http://www.ibm.com/investor/help/guide/investors-tips.wss#businessexecutiveQ. What number on the statement of cash flows do both the "business school dean" and "business executive" focus on as the most important figure? Why?
| Exercise 7.2 | Cash-Flow Forecasting |
Business Planning and Financial Forecasting has a nice section on "Why do a cash flow forecast?" After reading that section, you should be able to answer the following questions.
http://smallbusinessbc.ca/pdf/bpff2002.pdfQ. Why is it important to prepare a cash-flow forecast? What three-step procedure does this web site suggest for preparing a cash-flow forecast? What other piece of useful information did you find at this site that you think should be discussed in your text? Why?