and cash flows from financing activities. These three sections will now be
further explained in detail.
The operating activities section of the statement of cash flows lists
the sources and uses of cash that arise from the normal operations of a
firm. In general, the net cash flow from operations is computed as in-
come statement net income plus adjustments for noncash revenues and
expenses.
Cash flow from operating activities = Net income + Depreciation
- Change in modified net working capital
You may recall that net working capital is defined as the difference be-
tween current assets and current liabilities:
Net working capital = Current assets – Current liabilities26 AN INTRODUCTION TO FINANCIAL STATEMENTS
TABLE 2.5 (Continued)
Dec-03 Dec-02 Dec-01 Dec-00 Dec-99Common/Preferred 1,183.00 6,538.00 2,570.00 973.00 840.00
Purchased, Retired,
Converted, Redeemed
Long-Term 1,023.00 22.00 14.00 4.00 793.00
Borrowings
Increase (Decrease) (1,072.00) 1,799.00 (771.00) (671.00) (855.00)
in Short-Term
Borrowings
Reduction in Long- 196.00 245.00 391.00 28.00 176.00
Term Debt
Cash Dividends 2,746.00 2,381.00 2,047.00 1,724.00 1,479.00
Paid—Total
Common Dividends 2,746.00 2,381.00 2,047.00 1,724.00 1,479.00
(Cash)
Preferred Dividends 0.00 0.00 0.00 0.00 0.00
(Cash)
Other Sources— 0.00 0.00 0.00 0.00 0.00
Financing
Other Uses— 0.00 0.00 0.00 0.00 0.00
Financing
Net Cash Flow— (3,863.00) (6,953.00) (5,251.00) (3,100.00) (2,294.00)
Financing
Effect of Exchange 277.00 110.00 (40.00) (47.00) (72.00)
Rate on Cash
Changes in Cash 0.00 0.00 0.00 0.00 0.00
and/or Liquid ItemsData provided by Thomson, © Copyright 2004 Thomson.