Phoenix ACC 545 Statement of Cash Flow and Liquidity Analysis
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<strong>Phoenix</strong> <strong>ACC</strong> <strong>545</strong> <strong>Statement</strong> <strong>of</strong> <strong>Cash</strong><br />
<strong>Flow</strong> <strong>and</strong> <strong>Liquidity</strong> <strong>Analysis</strong><br />
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nix-acc-<strong>545</strong>-statement-<strong>of</strong>-cash-flow<strong>and</strong>-liquidity-analysis/<br />
<strong>Phoenix</strong> <strong>ACC</strong> <strong>545</strong> <strong>Statement</strong> <strong>of</strong> <strong>Cash</strong> <strong>Flow</strong> <strong>and</strong> <strong>Liquidity</strong> <strong>Analysis</strong><br />
Preview:<br />
Starbucks uses the indirect method to prepare the statement <strong>of</strong> cash flows because the operating section starts<br />
with the net income which is followed by adjustments in non-cash items <strong>and</strong> adjustments in operating asset<br />
<strong>and</strong> liability accounts. Net income is a line item in the operating activities section <strong>of</strong> the cash flow statement.<br />
Net income is calculated by subtracting cost <strong>of</strong> sales, operational expenses, depreciation, amortization,<br />
interest, <strong>and</strong> taxes from total revenue. Net income from the income statement is usually the first item <strong>of</strong> the<br />
cash flow statement, (Investopedia, 2017).