Net Change in Cash (Overall Cash Flow)

At the end of the cash flow statement, after the three main categories of cash activities, both IAS and U.S. GAAP require companies to show the net change in cash holdings for the year and reconcile that figure with the beginning and ending cash balances. Multinational firms must include exchange rate effects based on the rates used to translate items on the balance sheets. For example, Canada’s Quebecor Media, Inc. presented the following reconciliation in their cash flow statement for the years ended 31 December 2006:

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AT&T lists several adjustments related to discontinued operations on its cash flow statements. These cash flows would have been classified as operating cash flows if the company were still in the relevant lines of business. Since the company is no longer in those businesses it segregates the cash flows into their relevant categories and reports the necessary reconciliation at the bottom of the statement of cash flows.

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For more information, see all articles on: Accounting, Financial Statement Analysis, Fundamental Analysis

See also:
  • Free Cash Flow
  • The Statement of Cash Flows
  • Calculating Returns in a Portfolio
  • Computing Free Cash Flow to Equity from Free Cash Flow to the Firm
  • Computing Free Cash Flow to the Firm from the Statement of Cash Flows
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