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General Rules for Cash Flows (Indirect)

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GENERAL rules for the Statement of Cash Flows (Indirect Method)

Cash provided by op. activities:

Net Income (from Income Statement)
+ Depreciation, amortization, and/or depletion (From Income Statement)
+ Decrease in CURRENT Asset accounts other than cash (calculate the difference between this period and last period from Balance Sheet)
- Increase in CURRENT Asset accounts other than cash (calculate the difference between this period and last period from Balance Sheet)
+ Increase in CURRENT Liabilities accounts (calculate the difference between this period and last period from Balance Sheet)
- Decrease in CURRENT Liabilities accounts (calculate the difference between this period and last period from Balance Sheet)
+ Loss on Disposal of PPE/Fixed Assets used in normal operations (From Income St.)
- Gain on Disposal of PPE/Fixed Assets used in operations (From Income Statement)

= cash provided by op. activities

Cash provided by investing activities:

- Increase in PPE and LONG-TERM Assets if paid cash (calculate the difference between this period and last period from Balance Sheet)
+ Decrease in PPE and LONG-TERM Assets if received cash (calculate the difference between this period and last period from Balance Sheet)
- Increase in Investments Assets if paid cash (calculate the difference between this period and last period from Balance Sheet)
+ Decrease in Investments Assets if received cash (calculate the difference between this period and last period from Balance Sheet)

= Cash provided by investing activities

Cash provided by financing activities:

+ Increase in LONG-TERM Liabilities if received cash (calculate the difference between this period and last period from Balance Sheet)
- Decrease in LONG-TERM Liabilites if paid cash (calculate the difference between this period and last period from Balance Sheet)
+ Increase in Stockholders…...

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