Warf Cash Flow
Maureen Steinwall, PhD
Walden University

Warf Cash Flow This assignment is looking for the student to demonstrate competencies in cash flow analysis. The process of calculating cash flow is practiced; in addition, a critical thinking element is introduced. A successful assignment will present the cash flow calculations and discussion using APA formatting.
Financial Statement of Cash Flows A financial statement of cash flows starts with the earnings before interest and taxes (EBIT). The analyst then adds back the noncash expenses such as depreciation, and deducts the cash needed for taxes providing a true view of the cash flow from operations. In this example, the cash from operations was $1,322,000 (see Figure 1).
The analyst then moves to the balance sheet to observe where the cash was used. In this example, the company purchased assets totaling $810,000 reducing their available cash to $512,000 ($1,322 minus $810). Perhaps at this point the analyst is feeling like they are on a scavenger hunt tracing the path (or flow) the cash followed during the period under review.
The final step is to review the change in the working capital requirements for cash. In this example, Warf needed cash to fund current assets such as receivables and inventory of $ 78,000. In addition, the company needed $92,000 to pay down current liabilities such as payables or current debt. The resulting cash flow is $342,000 positive from the period under review.

Figure 1. Financial Cash Flow Analysis for Warf Companies, Inc.

Accounting Statement of Cash Flows
A typical cash flow analysis starts by calculating the difference between the beginning and ending balance sheets in review (see Figure 2). The next step would be to place all the differences into the appropriate classifications. Was the cash transaction for operating, financing, or