1. Why are decision makers interested in a company’s statement of cash flows?
2. What is the purpose of the statement of cash flows?
3. What is a cash equivalent?
4. What are the three classifications of the statement of cash flows?
5. What is the general definition of operating activities?
6. Give three activities likely to be found in the operating section.
7. What is the general definition of investing activities?
8. Give three activities likely to be found in the investing section.
9. What is the general definition of financing activities?
10. Give three activities likely to be found in the financing section.
11. What are the two methods used to calculate cash flows from operating activities?
12. Name the three steps used to convert a company’s income statement to cash flows from operating activities using the direct method.
13. Why are interest and dividend revenue and interest expense included as operating activities?
14. Why can it be difficult to determine cash flows from investing and financing activities?