- CFA Exams
- 2023 Level I
- Topic 3. Financial Statement Analysis
- Learning Module 20. Understanding Cash Flow Statements
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Learning Outcome Statements PDF Download
|1. Classification of Cash Flows and Non-Cash Activities|
compare cash flows from operating, investing, and financing activities and classify cash flow items as relating to one of those three categories given a description of the items;
describe how non-cash investing and financing activities are reported;
contrast cash flow statements prepared under International Financial Reporting Standards (IFRS) and US generally accepted accounting principles (US GAAP);
|2. Preparing the Cash Flow Statement|
compare and contrast the direct and indirect methods of presenting cash from operating activities and describe arguments in favor of each method;
describe how the cash flow statement is linked to the income statement and the balance sheet;
describe the steps in the preparation of direct and indirect cash flow statements, including how cash flows can be computed using income statement and balance sheet data;
demonstrate the conversion of cash flows from the indirect to direct method;
|3. Cash Flow Statement Analysis|
analyze and interpret both reported and common-size cash flow statements;
calculate and interpret free cash flow to the firm, free cash flow to equity, and performance and coverage cash flow ratios.
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