Page 68 - CFA Lecture Day 8 Slides
P. 68
Session Unit 7:
26. Understanding Cash Flow Statements (B/B/A)
B. Net income – profit on sale of
building + depreciation = 45 – 20 +
75 = $100.
B. Cash from sale of building – purchase of machinery = 40
tanties
– 20 = $20.
A. Sale of preferred stock + issuance of bonds – principal
payments on bank borrowings – repurchase of common stock
– dividends paid = 35 + 50 – 15 – 30 – 10 = $30. Note that we
did not include $45 of debt retired through issuance of
common stock since this was a noncash transaction. Knowing
how to handle noncash transactions is important.
