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Chapter 22

1.3 Direct method to calculate cash generated from operations

$

Cash received from customers X
Cash paid to suppliers (X)

Cash paid to and on behalf of employees (X)
——

Cash generated from operations X
——

1.4 Statement of cash flows layout summary

$
Cash generated from operations X

Interest paid (X)
Tax paid (X)

——
Net cash from operating activities X/(X)

Net cash from investing activities X/(X)
Net cash from financing activities X/(X)

——
Increase/decrease in cash and cash equivalents X/(X)
Opening cash and cash equivalents X/(X)

——
Closing cash and cash equivalents X/(X)

——

1.5 Definitions

Cash: cash on hand (including overdrafts) and on-demand deposits.

Cash equivalents: short-term highly liquid investments, subject to
insignificant risk of changes in value.

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