I just had a interview for an Analyst role at an investment bank... one of the many questions were: I just sold a pen for 100 bucks, it cost 50, and the tax rate is 50%... walk me through how this flows through each financial statement.... The finance you explained in this video was definitely relevant to answering that question e.g. net income, and change in working capital (inventory) etc. -- thanks!!!
Great lesson this video. Wish you do more short video like that for non financial guys ! Wish you can share the excel file for reference offline. Thanks a lot.
Hi sir, this is a very well-informed video. I have a question. How about the interest expense in the income statement? Cash flow statement do take into account of that that entry ?
Thanks for the video. Very helpful. On the online accounting crash course we embed D&A expenses within appropriate expenses either COGs or S,G&A. Is it more correct or common even, to appear as its owndis-aggregated line item?
Hey! Congratulations for the excellent video, very didactic. I have a question, maybe it will not be answered at this point of time (we are in 2022 :) But I believed that PP&E should be reported net from Depreciation in the balance sheet. Am I wrong?
I mean, both periods are reporting PP&E net of Depreciation, thus I don't understand why we are adding Depreciation in period 1 and not in period 2 to calculate the different between them, which is essentially CAPEX.
thank you very much for that lucid and well formatted cash flow statement deconstruction. would you have a downloadable copy of your excel sheet? So we could follow the antecedent and dependent arrows? Thanks
Wow i appreciate this, i have been struggling figuring cashflow statement from varsity, i.e a simple concept of cash movements in Assets and Liabilities, i need a refund from my lecturer.
what i know that fixed asset must appear at historical cost with a contra account of accumulated depreciation appear right below them on the balance sheet.. in this case u may take the net defference between periods for FA.
Yuming Mao in my opinion this would not change the classification of a PPE asset. Just because it is available for sale does not change the purpose of the asset. But again, just my opinion on that...
It's the indirect method to calculate cash flow statements. Any increase in gross assets is a cash outflow. However, if you did not pay with cash then your liabilities would increase and any increase in liabilities is a cash inflow. Hence, increase in gross PP&E reduces cash, increase in liabilities increases cash for the same amount, and it is a wash.
Does this series count Depreciation twice? Once at the top (last video) and once in Cash from Investing? Can someone comment on this? Am I missing something?
+Anthony Baldor no. never mind. CapEx=∆PP&E-Depreciation. The count in this video is different from the per se add back in the last video and does not apply to CFS. The add back in this video is to get from ∆PP&E to CapEx.
Can somebody explain why capital expenditures and other long term asset increases were assumed to have occurred via an outflow of cash? It makes intuitive sense why they would require an outflow to increase. But why do we assume they were payed for 100% in cash? Could those things not foreseeably have been payed for partially or entirely on account? Thanks in advance.
It's the indirect method to calculate cash flow statements. Any increase in gross assets is a cash outflow regardless of being PP&E, A/R, etc. However, if you did not pay with cash then your liabilities would increase and any increase in liabilities is a cash inflow. Hence, increase in gross PP&E or any other asset reduces cash, increase in liabilities increases cash by the amount that was financed. I hope this helps.
![Financial Modeling Quick Lessons: Cash Flow Statement (Part 2) [UPDATED]](http://i.ytimg.com/vi/_4824rhQgDk/mqdefault.jpg)
![Financial Modeling Quick Lessons: Cash Flow Statement (Part 2) [UPDATED]](/img/tr.png)
• Source: Wall Street Prep's Quick Lesson Series
• Instructor: Matan Feldman
• Cash Flow Statement Excel Template: www.wallstreetprep.com/knowledge/financial-modeling-quick-lesson-cash-flow-statement-part-2/
• Financial Modeling Templates and Guides: www.wallstreetprep.com/wsp-blog/
Hi, just wanted to say that was a great explanation of a relatively daunting financial statement - even to us accountants.
I just had a interview for an Analyst role at an investment bank... one of the many questions were: I just sold a pen for 100 bucks, it cost 50, and the tax rate is 50%... walk me through how this flows through each financial statement.... The finance you explained in this video was definitely relevant to answering that question e.g. net income, and change in working capital (inventory) etc. -- thanks!!!
Did you get hired?
Many thanks, Sir. I learnt a lot in just 15 minutes. Excellent! video presentation of a complete CFS model.
Thank you. I can proudly state that I go to Google University, TH-cam School of Business.
Best Business School I know
It's a TOP RATED School!
i gotta tell you i´m love your content!
one day i´m going to buy a course and its gonna be one of the Wall Street Prep courses.
great vid. thanks for posting. I learned a lot in just 15mns, your logic in explaining the CFS was to the point w/o any noises.
Great lesson this video. Wish you do more short video like that for non financial guys ! Wish you can share the excel file for reference offline. Thanks a lot.
I am not an accounting major, but this is a very good medium to enhance your accounting skills
Great stuff with very clear explanations. Thanks for throwing in the Excel shortcut tips as well!
Very helpful lessen! Thank you for doing this video!
wonderful explanation, straight forward and simple
thank you for this simple and precise example
Thanks for the video!! Simple & Easy to follow.
Good one..wish you were my accounting teacher way back.
The real test of understanding is being able to explain it clearly. Sounds like your accounting teacher was a little confused. Yeah this guy is good.
fantastic video - well explained and walked through
Thanks a lot for this very comprehensive explanation!
Wow! Thank you sooooo much!!!!
Good lesson. Straightforward.
the best ever explanation, thnx
Very nicely explained
really informative video and handy presentation
great work !
congrats
Hi sir, this is a very well-informed video. I have a question. How about the interest expense in the income statement? Cash flow statement do take into account of that that entry ?
Thanks for the video. Very helpful.
On the online accounting crash course we embed D&A expenses within appropriate expenses either COGs or S,G&A. Is it more correct or common even, to appear as its owndis-aggregated line item?
Amazingly elaborate!
very well explained
Thank you for a great video!! Helped a lot!!
Hey! Congratulations for the excellent video, very didactic. I have a question, maybe it will not be answered at this point of time (we are in 2022 :) But I believed that PP&E should be reported net from Depreciation in the balance sheet. Am I wrong?
I mean, both periods are reporting PP&E net of Depreciation, thus I don't understand why we are adding Depreciation in period 1 and not in period 2 to calculate the different between them, which is essentially CAPEX.
Very nice work man
Thanks for this brother great vid
thank you very much for that lucid and well formatted cash flow statement deconstruction.
would you have a downloadable copy of your excel sheet? So we could follow the antecedent and dependent arrows?
Thanks
Can you explain me when portion of capital purchases I'd through cash and other portion through seller notes
very helpful thank you
Bravo!!
Wow i appreciate this, i have been struggling figuring cashflow statement from varsity, i.e a simple concept of cash movements in Assets and Liabilities, i need a refund from my lecturer.
Just wanted to make sure you were paying attention ;). Just kidding - sorry about that - I need to be better about shutting off my phone!
helped a lot! :) thank you
Amazing video , And I appreciate if you attach the Excel file of this video
yeah. while waiting for excel we might have creating ourselves. I can share it to you once i m done
can u provide the excel file in description
awesome! thank you
Great Video and Thanks A Lot...
6.26 I paused the video and start looking for my phone on my desk lol...
Balance Sheet always shows NBV of FA, then why do we need to deduct Dep or Amort. to get the figure?
what i know that fixed asset must appear at historical cost with a contra account of accumulated depreciation appear right below them on the balance sheet.. in this case u may take the net defference between periods for FA.
How about change in notes payable? How is this accounted for on the CF statement?
The change in notes payable it's 10.7, see the case increase in bank loan
p.s can you do one on analysing ratios or reporting on ratio outcomes?
great!!!
why net interes expenses not added when the cash flow statemen began with net income(PAT)
Why accounts payable in the operation activity
hey wow its easy to umderstand me
at 8:25 Why would you take both of the BOP for LT debt and subtract them? Why shouldn't you add them?
What is the difference between loan and long term debt?
at 4:09 could it also be possible that cash was not used, and those assets were transferred in from PPE to available for sale?
Yuming Mao in my opinion this would not change the classification of a PPE asset. Just because it is available for sale does not change the purpose of the asset. But again, just my opinion on that...
What about pp&e financed with accounts payable? You seemed to have made a big assumption here as these would be a non-cash investing activity.
It's the indirect method to calculate cash flow statements. Any increase in gross assets is a cash outflow. However, if you did not pay with cash then your liabilities would increase and any increase in liabilities is a cash inflow. Hence, increase in gross PP&E reduces cash, increase in liabilities increases cash for the same amount, and it is a wash.
Does this series count Depreciation twice? Once at the top (last video) and once in Cash from Investing? Can someone comment on this? Am I missing something?
+Anthony Baldor no. never mind. CapEx=∆PP&E-Depreciation. The count in this video is different from the per se add back in the last video and does not apply to CFS. The add back in this video is to get from ∆PP&E to CapEx.
thanks... very dummy friendly!♈
this video is the shit!!!! Wolf of Wall Street here I come!!! who got the ludes on deck???!!!! let's turn up!!!
Can somebody explain why capital expenditures and other long term asset increases were assumed to have occurred via an outflow of cash? It makes intuitive sense why they would require an outflow to increase. But why do we assume they were payed for 100% in cash? Could those things not foreseeably have been payed for partially or entirely on account? Thanks in advance.
It's the indirect method to calculate cash flow statements. Any increase in gross assets is a cash outflow regardless of being PP&E, A/R, etc. However, if you did not pay with cash then your liabilities would increase and any increase in liabilities is a cash inflow. Hence, increase in gross PP&E or any other asset reduces cash, increase in liabilities increases cash by the amount that was financed. I hope this helps.
asris