Cash equivalents "Short-term (90 days or less), highly liquid investments, including money market accounts, commercial paper, and U.S. Treasury bills."

Cash flows to assets The ratio of net cash flows from operating activities to average total assets.

Cash flows to sales The ratio of net cash flows from operating activities to sales.

Cash flow yield The ratio of net cash flows from operating activities to net income.

Cash-generating efficiency The ability of a company to generate cash from its current or continuing operations.






Direct methodcome statement. The procedure for converting the income statement from an accrual basis to a cash basis by separately adjusting each item on the in






Financing activities Business activities that involve obtaining resources from stockholders and creditors and providing the former with a return on their investments and the latter with repayment.

Free cash flow The amount of cash that remains after deducting the funds a company must commit to continue operating at its planned level; net cash flows from operating activities minus dividends paid minus net capital expenditures.






Indirect method "The procedure for converting the income statement from an accrual basis to a cash basis by adjusting net income for items that do not affect cash flows, including depreciation, amortization, depletion, gains, losses, and changes in current assets and current liabilities."

Investing activities "Business activities that involve the acquisition and sale of long-term assets and marketable securities, other than trading securities or cash equivalents, and the making and collecting of loans."






Noncash investing and financing transactions "Significant investing and financing transactions involving only long-term assets, long-term liabilities, or stockholders’ equity that do not affect current cash inflows or outflows."






Operating activities Business activities that involve the cash effects of transactions and other events that enter into the determination of net income.






Statement of cash flows "A financial statement that shows how a company’s operating, investing, and financing activities have affected cash during an accounting period."