Why are there differences between BS and Statement of Cash Flows
Hi All,
Due to the quarantine, I'm doing some modeling practice to pass the time. I came across this problem that confused me while I was comparing the Balance Sheet and Statement of Cash Flows information from for Dollar General's (DG) latest 10K:
Why are there material differences in information between the cash flow statement and the balance sheet? For instance, on the B/S the difference in inventories from FY17-FY18 is 488M but 521M on the cash flow statement for the same period.
I am seeing a similar difference with Capital Expenditures on the B/S (Change in PP&E) vs. CapEx on the CFS.
I would really appreciate it if someone with more experience than myself could explain these differences as I haven't been able to find a definitive answer online.
Also, all of my numbers have been pulled from the FY 2019 10K available here: https://investor.dollargeneral.com/websites/dolla…
M&A activity is a common reason.
The BS numbers include Depreciation
What about things like receivables?
Generally speaking consider the non-cash effects - receivables have allowances for doubtful accounts. There’s an initial recording of the allowance (non-cash) that’ll flow through IS, CFS, then BS that impacts earnings. If company is able to collect more than allowance, there’d be other steps to unwind that amount.
Working capital accounts can be tricky because the amount of variability between reporting periods.
Additionally, often times a company’s depreciation on the balance sheet for doesn’t match up with what’s reported on the CFS. Certain depreciation can be clumped in with cost of sales depending on the nature of their business. So this can create another discrepancy
Voluptatum omnis earum et eius aut ut. Modi porro assumenda vel ut veniam aliquid.
Est nisi autem qui. Blanditiis voluptate exercitationem libero. Dolorem consectetur tempore aut architecto delectus fugit ea. Nihil at maxime est est et laudantium. Rerum aliquid neque esse voluptas quae eum iure. Provident sapiente dignissimos beatae rerum et inventore laboriosam.
Eos earum quis deleniti consequatur exercitationem aut ut. Qui illum ducimus dolorem minus corrupti. Consequatur excepturi quia consequatur nemo sapiente. Vero et repellendus rerum in qui quae voluptatem. Dolor ratione quasi aut magni quo. Qui possimus omnis et libero. Dolor quasi harum praesentium aut velit.
Maiores dignissimos alias quia harum. Nobis ea qui vel molestiae numquam maxime rerum.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...