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Summary of Cash Flow Coverage

Nikolia Bazley, 8th Edition, Copyright 2000

Coverage found in chapters 4, 5 & 21

Chapter 4, The Income Statement and Statement of Cash Flows

Pages 134 138

Summary of coverage includes very brief discussion of the uses of the statement,

Explains the three major sections. Includes one complete exhibit using theindirect method. Includes a short explanation of the direct method. Includes four

exercises. Includes four problems.

Chapter 5, Additional Aspects of Financial Reporting and Financial Analysis.

Pages 197

Includes calculation and usefulness of the following ratios:

Cash flows from operations to salesCash flow from operations to net income

Cash flow from operations per share

Cash flow from operations to maturing debt

Also mentions but does not discuss CFO divided by cash operating expenses, totalassets, or total liabilities, and CFO divided by the cash flow for investingactivities that are needed to maintain the operating capacity of the company.

There were no exercise or problems that dealt with cash flow.

Chapter 21, Statement of cash flows

Pages 996 1034

Emphasis on indirect method, only two pages in chapter on direct method. Direct

method is further covered in appendix.

Approximately 15 exercises assume indirect method, four exercises from

appendix assume direct method.

Approximately 13 problems assume indirect method, four problems from

appendix assume direct method.

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Kieso, Weygandt & Warfield 10th Edition, 2002

Coverage found in chapters 5, 24

Chapter 5, The Balance Sheet and Statement of Cash Flows

Pages 206 212

Includes summary on purpose of cash flow statement, the content and format.

Includes one simple example of how a cash flow statement can be prepared froma simple income statement and balance sheet. Indirect method is assumed. Two

pages on the usefulness of the cash flow statement. No mention of direct method.

Two ratios discussed:

Current cash debt coverage ratioCash debt coverage ratio

Seven exercises on cash flows and two problems all using indirect method.

Chapter 24, Statement of Cash Flows

Page 1310 1346

Discusses the purpose, content and format of the cash flow statement. First

example uses indirect method. The discussion follows of both direct and indirectmethods using simple examples. Indirect method and then direct method are

discussed in more detail. Advantages and disadvantages of both methods are

discussed. Comprehensive worksheet illustration is discussed and statement isprepared using indirect method. Many special situation discussed.

Chapter has 13 brief exercises, two specify direct method and four specify

indirect method.

Chapter has 24 exercises, seven specify direct method and fourteen specify

indirect method.

Chapter has 12 problems , three specify direct method and seven specify indirect

method and two require preparation and comparison of both.

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Spiceland, Sepe & Tomassini, Updated 2nd Edition, Copyright 2001

Coverage found in chapters 3, 22

Chapter 3, The Income Statement & Statement of Cash Flows

Pages 132 135

Very brief discussion on the usefulness of the statement and classification of cash

flows. Very brief discussion on direct and indirect methods. Four exercise and

one problem on cash flow.

Chapter 22, The Statement of Cash Flows Revisted

Pages 1024 1060

All discussion from pages 1024 1055 assume the direct method. The indirect

is presented as an alternative and discussed very briefly. Five performanceratios which includes cash are listed as well as six sufficiency ratios

are listed. No discussion of the usefulness of these ratios is given. Appendix A is

an example of the indirect method using a spreadsheet and appendix B is anexample of the T account method. Out of 25 exercises six are indirect and two

are both direct and indirect. Out of 20 problems four ask for the indirect method

and four problems ask for the direct method but also include the separate scheduleusing the indirect method for operating activities.

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