Читать книгу Accounting For Dummies - John A. Tracy - Страница 46

When I (coauthor John) started in public accounting, the cash flow statement wasn’t required in financial reports. In 1987, the American rulemaking body for financial accounting standards (the Financial Accounting Standards Board) made it a required statement. Relatively speaking, this financial statement hasn’t been around that long — only about 35 years at the time of this writing. How has it gone? Well, in our humble opinion, this financial statement is a disaster for financial report readers.

Statements of cash flows of most businesses are frustratingly difficult to read and far too technical. The average financial report reader understands the income statement and balance sheet. Certain items may be hard to fathom, but overall, the reader can make sense of the information in the two financial statements. In contrast, trying to follow the information in a statement of cash flows — especially the first section of the statement — can be a challenge even for a CPA. (More about this issue is in Chapter 8.)

Imagine you have a highlighter in your hand and the three basic financial statements of a business in front of you. What are the most important numbers to mark? Bottom-line profit (net income) in the income statement is one number you’d mark for sure. Another key number is cash flow from operating activities in the statement of cash flows. You don’t have to understand the technical steps of how the accountant gets this cash flow number, but pay attention to how it compares with the profit number for the period. (We explain this point in more detail in Chapter 11.)

Cash flow is almost always different from net income. The sales revenue reported in the income statement does not equal cash collections from customers during the year, and expenses do not equal cash payments during the year. Cash collections from sales minus cash payments for expenses gives cash flow from a company’s profit-making activities; sales revenue minus expenses gives the net income earned for the year. Sorry, mate, but that’s how the cookie crumbles.