Archive for the ‘Cash Flows Statement’ Category

Preparation of Cash Flow statement of PEPSICO using Indirect Method example 2

November 21, 2010 3 comments

Note: In this second example of cash flow preparation, I am using the actual data of PEPSICO.

How to prepare cash flow from the start, you can check my post previous In my previous post used additional information extracted from the analyses of two year balance sheet. In this tutorial I will analyze whole two year balance sheet and will extract additional information in the categories of Operating activities, Investing activities and Financing Activities.

Analyze the Balance Sheet and income statement:

Below is the balance sheet of PEPSICO of 2000 and 2001 and income statement .of 2001


Millions of dollars



Current Assets
Cash and equivalent 1649 1505
Receivable 2142 2129
Inventories 1310 1192
Other Current Assets 752 791
Total Current Assets 5853 5617
Fixed Assets
Property, Plant and Equipment 12866 11466
Less: Accumulated Depreciation 5990 4908
Net Fixed Assets 6876 6558
Net Intangible Assets 4841 4714
Other Assets 4125 3868
Total Assets 21695 20757
Liabilities and Shareholders Equity
Current Liabilities
Debt Due for repayment 354 202
Accounts Payable 1238 1212
Other Current Liabilities 3406 3381
Total Current Liabilities 4998 4795
Long term debt 2651 3009
Other long term liabilities 5398 5349
Total Liabilities 13047 13153
Shareholders Equity
Common Stock and other paid-in capital 35 667
Retained earnings 8605 6937
Total Shareholders equity 21695 20757
Total Liability and Shareholders Equity 21695 20757

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Preparation of cash flows statement using Direct Method Example 1

November 15, 2010 7 comments

Cash flows statement prepared using two financial statements, 1st Income Statement and 2nd Balance Sheet.

Before preparing cash flows statement,

a. Analyze Balance Sheet

b. Reordering of Income Statements


a. Analyze Balance Sheet:

we will analyze balance sheet each account of current year and previous year. From balance sheet analyzing we extract additional information (AI) for cash flows statement and regroup these additional information in three major categories.

  • Operational Activities
  • Investing Activities
  • Financing Activities

In this tutorial, I will not explain the analyzing of balance sheet, I just provide data in the form of additional information according to above three categories. I will use this categorize additional information for cash flow preparation directly. Read more…