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Basic Question 3 of 11
Net cash provided by operating activities was $45,000. Net cash provided by investing activities was $50,000. The beginning and ending cash and cash equivalent balance was $12,000 and $14,000, respectively. What was the cash flow provided (or used) in financing activities?
User Contributed Comments 11
| User | Comment |
|---|---|
| brimann | CFO (45) + CFI (50) + CFF (-93) Cash Flow was Negative = change in cash acct (2) + beg. period cash (12) = end period cash (14) |
| epizi | This is a little hard. Does it mean CFF=CFO+CFI? |
| bobert | well, not to generalize, but it isnt exactly CFF=CFO+CFI In this case it would be CFO+CFI = CFF + change in cash equivalent balances. |
| Saxonomy | Smart grasshopper, me! |
| Saxonomy | The correct equation would be: Beginning Bal (positive $12k here) + Change in CFO (positive $45k here) + Change in CFI (positive $50k here) + Change in CFF (negative $93k here) = Ending Balance (positive $14k here) In other words, the company lost $93k cash through it's financing activities, and that sucked up all the money they made from operating and investing activities i.e. $45k + $50k. Ask the CFO to see me in my office immediately! |
| Saxonomy | To be more specific, they didn't "lose" money. They just spent more than they received. I hope those financing efforts have a positive NPV. |
| ColonelCFA | I was TRICKED! I read it that cash = 12k and cash eq = 14k, not that beginning balance = 12k and ending balance = 14k. fool me once... |
| safash | Begining Bal+CFO+CFI-CFF=ENding Bal 12000+45000+50000-CFI=14000 107000-14000=CFI CFI = 93000 |
| johntan1979 | CFO + CFI + CFF = End balance - Begin balance If either cash flow component is +ve, it's inflow -ve, it's outflow |
| Shaan23 | Where I got confused was where it said Net Cash PROVIDED was 45000 and 50000. I assumed cause it was provided it was being used and therefor both were negative(Decrease CFO and CFI). |
| zhefuli | \Sigma_i CF_i = \Delta CashBalance |
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Learning Outcome Statements
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
CFA® 2025 Level I Curriculum, Volume 2, Module 4.