Under the equity method of accounting, the Group s share of the after tax profits and losses of the joint ventures are shown on one line of the consolidated income statement, its share of their net assets are shown on one line of the consolidated statement of financial position and the consolidated statement of cash flows reflects cash flows between the Group and the joint ventures (investments in and dividends received from joint ventures) within cash flows from investing
The second step is to identify cash flows from investing
The statement of cash flows is divided into three sections: cash flows from operating activities, cash flows from investing
activities, and cash flows from financing activities.
We do not anticipate any large investments other than capital spending, and as a result, we expect cash flows from investing
activities to remain level with the previous fiscal year.
This is the result of an improvement in operating income and an increase in cash flows from operating activities, due to a decrease in accounts receivables and lower levels of inventory, in combination with lower than expected cash flows from investing
activities due to efficient execution of capital expenditures in SOFTBANK MOBILE Corp.
While cash flows from investing
and financing are important components, the most scrutinized figure is likely to be cash flow from operations.
A line-by-line tour of a cash flow statement with special attention paid to key indicators in cash flows from operating activities, cash flows from investing
activities and cash flows from financing activities that could create a capital crunch for your portfolio companies as well as impact when they need to start looking to raise an additional round of capital or pursue an exit strategy
The three net cash flows include cash flows from operations (CFFO), cash flows from investing
(CFFI), and cash flows from Financing (CFFF).
Because cash flows are the focus of this study, the analysis included the following variables as a percentage of operating assets: (1) cash at year end; (2) cash flows from operations (CFFO); (3) cash flows from investing
(CFFI); and (4) cash flows from financing (CFFF).
30, FY ended 2006 2005 3/31/06 Cash Flows from Operating Activities 1,723 1,127 13,159 Cash Flows from Investing
Activities 999 (4,882) (6,414) Free Cash Flow 2,722 (3,754) 6,744 Cash Flows from Financing Activities (3,911) 3,339 (1,419) Cash and Cash Equivalents, End of Term 23,235 18,645 24,436
30 (3) Consolidated Cash Flows Cash Flows from Operating Activities 1,127 798 8,364 Cash Flows from Investing
Activities (4,882) (1,664) (3,936) Cash Flows from Financing Activities 3,339 (1,590) (3,369) Cash and Cash Equivalents, End of term 18,645 15,386 19,035
In determining its original classification for the income tax payments, as cash flows from investing
activities, the Company considered the fact that these income tax payments directly related to the sale of a business and discussed the presentation with its independent registered public accounting firm, which concurred with that presentation.