Sentrino Company Uses the Direct Method for Its Statement of Cash

question 119

Essay

Sentrino Company uses the direct method for its statement of cash flow. Assume Accrued Liabilities relate to Operating Expenses. It reports the following information regarding the year ending December 31, 2014: Assume that there were no sales of long-term assets, no Interest Revenue, and no expenses other than the expenses shown above. Also, assume that Accounts Payable is for purchases of inventory only. Prepare the operating activities section of the statement of cash flows.

Assess the implications of changes in short-term financial policies on a company's risk profile and liquidity.

Analyze the effects of cash flow movements and financing decisions on the firm's financial condition.

Understand the concept and implications of risk in finance.

Comprehend the strategies used by companies to hedge financial risks, especially exchange rate risks.

---

Definitions:

Investing Activities

Transactions involving the purchase and sale of long-term assets and investments, part of a company's cash flow statement.

Cash Flow Statement

This financial document provides a comprehensive view of a company's cash inflows from operations and investments, alongside the expenditures on business and investment actions within a designated timeframe.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's profits or losses.

Generally Accepted Accounting Principles

A set of widely adhered to principles and guidelines for reporting financial information.