Week 15 · Readings & resources

Week 15 — Readings & Resources

Financial Accounting Free sample edition

Your primary reading is Chapter 15 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 74–82 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (19–21 min total)

① Building the statement, section by section

Chapter 15, Section “Start the indirect method with net income” · Session 1, Segment 1, “Three sections and the indirect method” · Remember: start with net income, add back depreciation, subtract a gain, then adjust for the changes in current operating assets and liabilities.

Cash flow statement indirect method — The Finance Storyteller — a short worked example that starts with net income of 112, adds back 20 of depreciation because no one is paid for it, then treats a 50 rise in inventory as a use of cash and a 50 rise in payables as a source, for 132 of operating cash; it then ties the 132 increase to cash moving from 60 to 192. Its remarks on earnings before interest and taxes and on stock-based compensation go beyond this course. (video, 5 min) (captions: creator)
The Operating Section of the Statement of Cash Flows (Indirect Method) — Learning with Luke — the two kinds of adjustment to net income, first depreciation and the gain on a sale of equipment, then the changes in current assets and liabilities, with a chart of the four sign rules and a short proof using receivables that rise from 30,000 to 40,000; its worked example reaches 8,000 of net cash provided by operating activities. It notes that notes receivable and notes payable are exceptions to the current-item rule. (video, 10 min) (captions: creator)
The Investing and Financing Sections of the Statement of Cash Flows — Learning with Luke — the same example's investing and financing lines: equipment that cost 15,000 sold for 9,000 at a 2,000 gain, a 10,000 equipment purchase, a stock issue, a cash dividend, and a bond repayment, ending with a 10,000 net increase that ties cash from 34,000 to 44,000. It records the dividend payment with a debit to retained earnings, where the chapter's entries run through Dividends and Dividends Payable, and its investing list includes notes receivable and investments this course does not key. This builds on Week 14's work with stockholders' equity, because the stock issue and the dividend are the financing lines. (video, 14 min) (captions: creator)
Cash flow statement: Indirect method — Wikipedia — the encyclopedia's section on the indirect method, with a list of sign rules for current assets and liabilities, gains, and losses, and a small example in which net income of 100 and a 25 rise in receivables give 75 of operating cash. Read the indirect method part only; its financing rules list items the chapter classifies differently, so trust the chapter there. (reading, 4–6 min)

② Why profit and cash differ

Chapter 15, Section “Assemble the statement and tie it to cash” · Session 1, Segment 2, “Net income versus cash” · Remember: net income records revenue and expenses when earned and incurred, so cash can run ahead of it or fall behind it.

Why Your Business is Seeing Profit But Not Cash Flow — GrowthForce — a bookkeeping firm's short explainer of why owners see a profit but little cash, naming five places the cash goes: inventory bought ahead of sales, sales on account not yet collected, long-term assets such as furniture, paying down debt or payables, and a year of insurance or rent paid in advance. It points owners to the balance sheet and the statement of cash flows. Use it while completing the Week-15 module overview. (video, 5 min) (captions: automatic)

③ Reading four ratios

Chapter 15, Section “Compute the current ratio and debt to total assets” · Session 2, Segment 3, “Four ratios, read in plain sentences” · Remember: a ratio describes the business in one plain sentence and is never good or bad on its own.

Current ratio explained — The Finance Storyteller — current assets divided by current liabilities, read as dollars of current assets for each dollar of current liabilities, with what ratios of 0.5, 1, and 2 mean; it warns that a very high ratio can mean cash not put to use and a ratio below 1 can come from tight management of receivables and payables. It compares real companies' figures from older annual reports, which this course does not key, and it repeats the common view that 1 or higher is good, where the course reads each ratio without a verdict. (video, 10 min) (captions: creator)
Profit Margin, Gross Margin, and Operating Margin - With Income Statements — The Organic Chemistry Tutor — profit margin as net income divided by sales and gross margin as sales minus cost of goods sold, divided by sales, each worked on invented companies, including one whose gross margin is 37.5 percent; watch the profit margin and gross margin parts and skip operating margin, which this course does not key. Its sample income statement carries lines this course does not use. (video, 17 min) (captions: automatic)

④ Finding and reading a 10‑K

Chapter 15, Section “Read a public company's 10‑K on EDGAR” · Session 2, Segment 4, “A real annual report” · Remember: a 10‑K is read for the shape of its statements, and no real company's figure is ever keyed.

How to Read a 10‑K — Investor.gov — the SEC's investor-education page listing the main parts of a Form 10‑K, from the business description and risk factors to management's discussion and the section that holds the audited income statement, balance sheets, and statement of cash flows; read it to know where the statements sit, not as advice on investing. (reading, 1–2 min)
Using EDGAR to Research Investments — Investor.gov — the SEC's guide to EDGAR, its free public database of filings: how to search for a company by name or ticker, and how the form type column marks an annual report as 10‑K and adds a letter A to mark an amended one. Read the opening and the part on financial information and stop before the proxy, insider, and ownership forms. (reading, 3–5 min)

Optional one-stop reference (free online reference)

Beginners' Guide to Financial Statements: Cash Flow Statements — U.S. Securities and Exchange Commission — the SEC's plain-language guide; read its Cash Flow Statements section on operating, investing, and financing activities and its closing part on how the statements fit together, and skip its ratio list, which uses different ratios from the four this course keys. (reading, 5–8 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

Provenance: Built with The Course Maker · samples.thecoursemaker.com