Statement of Cash Flows: Indirect Method, Working Capital & Free Cash Flow
Classify cash flows, build the operating section with the indirect method, get the working capital signs right, back out capex and gains from the PP&E roll-forward, rebuild financing flows, reconcile the direct method, calculate FCF, FCFF and FCFE and judge cash flow quality with a bridge chart: 8 hands-on labs on one fictional outdoor retailer. IAS 7 / ASC 230 concepts, no affiliation with any standard setter. Educational only, not accounting or investment advice.
The first lesson is free — no account needed.
About this course
A statement of cash flows course that prepares the full cash flow statement of one fictional outdoor retailer, Fenmoor Outdoor Co., in a spreadsheet, for accounting and finance students, analysts, bookkeepers and exam candidates. You sort a year of cash transactions into operating, investing and financing activities, start the operating section from net income with the indirect method and add back non-cash items, turn two balance sheets into working capital changes with the right signs, back out capex and the gain on sale from the PP&E roll-forward, rebuild debt, dividend and buyback flows, prove that the direct method gives the same operating cash flow, calculate FCF, FCFF and FCFE, and judge cash flow quality with an accrual ratio and a bridge chart. General IAS 7 and ASC 230 concepts, with no affiliation with any standard setter. Educational only, not accounting or investment advice. The first lab is free.
Lessons
- Classifying Cash Flows: Operating, Investing or Financing?Free
- The Indirect Method: From Net Income to Cash, Non-Cash Items First Pro
- Working Capital Changes from Two Balance Sheets: the Sign Logic Pro
- Investing Activities from the PP&E Roll-Forward: Capex, Disposals and Gains Pro
- Financing Activities: Debt, Dividends and Share Buybacks Pro
- The Direct Method and Its Reconciliation to the Indirect Method Pro
- Free Cash Flow: FCF, FCFF, FCFE and Cash Conversion Pro
- Cash Flow Quality: CFO/Net Income, the Accrual Ratio and a Bridge Chart Pro