Why are cash flow and income typically different? What major account/s tend to drive this difference?
Cash flow calculation would include only cash transactions while income is calculated based on accounting rules. Cash flow is calculated as cash inflow less cash outflow while income is calculated as revenue less expenses. The major accounts which leads to difference in these two are depreciation (non-cash expense), accrued expense and accrued revenue account. Accrued expense are expenses due and not paid, these are shown as deduction from income but do not impact on cash flow. Similarly depreciation would decrease income but have no impact on cash flow since there is no cash outflow. Accrued income are income due but not yet received, these are shown as increase in income but do no result in cash inflow.
Why are cash flow and income typically different? What major account/s tend to drive this difference?
What is the difference between a current asset and a long‐term asset? Why is cash typically listed first on a balance sheet? List and explain the major items found on an income statement. What is accrual accounting? Give an example of how accrual accounting affects a company's financial statement. List the four categories of financial ratios and give an example of each. What is the purpose of ratio analysis? What is a cash budget? Briefly outline what a simple cash...
Why is the difference between net income and cash flow from operations important?
1. Describe the difference between Net Income, Net Cash Flow (from cash flow statement) and Free Cash Flow. Explain why free cash flow is the most useful metrics for investors.
1. Explain why purchasing power parity measures of income levels tend to show a smaller difference between poor and rich countries. 2. In what way(s) do the development paths chosen by Pakistan and Bangladesh differ? What are the main factors that have contributed to these differing paths?
why is the cash flow statement important? How does it differ from the income statement?Describe the significance of each of the three major sections of the cash flow statement in detail.
What is the difference between Comprehensive Income and Other Comprehensive Income? (include where in the financial statements they are found). Describe the difference between Comprehensive Income and Net Income? What ASC (s) contain significant guidance for Comprehensive Income and Other Comprehensive Income? List at least 5 types of items that belong in Comprehensive Income and Other Comprehensive Income. OCI is presented net of tax—show me an example of how the taxes impact the amount shown and state why “net of...
What is the difference between cash flow and accounting flow?
Major car manufacturers tend to have long-term strategic relationships with core sub-assembly suppliers (e.g. drive train - engine, interior furniture, electrical system, etc.). Using Williamson’s Transaction Cost Economics theory, identify two reasons why each party (the manufacturer and the supplier) would wish to have a privileged relationship rather than rely on the marketplace (pure price-based tendering) for their buying and selling.
Major car manufacturers tend to have long-term strategic relationships with core sub-assembly suppliers (e.g. drive train – engine, interior furniture, electrical systems, etc.). Using Williamson’s Transaction Cost Economics theory, identify two reasons why each party (the manufacturer and the supplier) would wish to have a privileged relationship rather than rely on the marketplace (pure price-based tendering) for their buying and selling.
What are three reasons why Cash Flow from Operations and Net Income might differ?