The Statement of Cash FlowsThe statement of cash ftows reportsthe company's cash inflows andoutflows from operating,investingand financing activities
STATEMENTOFCASHFLOWSOperatingactivities- Companies operate by buying goods andservices, which are sold to customersInvestingActivities Companies invest in long-term assets that areused to run the businessFinancing Activities Companies finance themselves by issuing stockand borrowing money
STATEMENT OF CASH FLOWS Operating activities – Companies operate by buying goods and services, which are sold to customers Investing Activities – Companies invest in long-term assets that are used to run the business Financing Activities – Companies finance themselves by issuing stock and borrowing money
STATEMENTOFRETAINEDEARNINGSThe statement of retained earnings reportsthat portion of net income the company hasretained, or kept for use in the business-Net income increases retained earnings-Dividends paid to stockholders decreaseretained earnings
STATEMENT OF RETAINED EARNINGS The statement of retained earnings reports that portion of net income the company has retained, or kept for use in the business – Net income increases retained earnings – Dividends paid to stockholders decrease retained earnings
Relationships Amongthe Financial StatementsIncomeStatement-Year EndedDecember 31.2003Revenues$700.000670.000Expenses$ 30,000Net incomeStatenent of Retained Earnings -Year EndedDecember 31,2003$180.000Beginning retained earnings30,000Netincome(10,000)Cash dividends$200,000Endingretaned earnings
Relationships Amongthe Financial StatementsBal ance Sheet -December 31. 2003AssetsCash$25.000275,000All other assets$300,000Total assetsLiabilities$120.000Total liabilitiesStockhol ders'equity40,000Common stock200.000Retainedearnings(60,000)Otherequity$300.000Total liabilities and stockhol ders'equity