Analyzing Financing Activities 4 CHAPTER
4 CHAPTER Analyzing Financing Activities
Current Asset l ntroduction Classification Current(short Noncurrent term)Assets (Long-Term) Assets Resources or claims to resources that are Resources or claims expected to be sold, to resources that are collected or used expected to yield within one year or the benefits that extend operating cycle, beyond one year or whichever is longer the operating cycle, whichever is longer
Current (shortterm) Assets Noncurrent (Long-Term) Assets Resources or claims to resources that are expected to be sold, collected, or used within one year or the operating cycle, whichever is longer. Resources or claims to resources that are expected to yield benefits that extend beyond one year or the operating cycle, whichever is longer. Current Asset Introduction Classification
Current Asset ntroduction Operating Cycle Cash on hand Cash on hand 00 2①0 25 o0 aao 3 3 Services sold to Products sold customers to customers
Current Asset Introduction Operating Cycle Services sold to customers Cash on hand 1 2 Cash paid to employees 3 4 Customers pay for services Products sold to customers Cash on hand 1 2 Cash paid for products 4 Customers pay for products 3
Current Asset l ntroduction Cash, Cash Equivalents and Liquidity Cash Currency, coins and amounts on deposit in bank accounts, checking accounts, and some savings accounts
Cash Currency, coins and amounts on deposit in bank accounts, checking accounts, and some savings accounts. Current Asset Introduction Cash, Cash Equivalents and Liquidity
Current Asset l ntroduction Cash, Cash Equivalents and Liquidity Cash Equivalents Short-term, highly liquid investments that are o Readily convertible to a known cash amount 2 Close to maturity date and not sensitive to interest rate changes
Cash Equivalents Short-term, highly liquid investments that are: Readily convertible to a known cash amount. Close to maturity date and not sensitive to interest rate changes. Current Asset Introduction Cash, Cash Equivalents and Liquidity