Additional Expenditures

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Chapter 16: Cash is King - Page 16.7

Additional Expenditures

In the Sample Case Cash Spent illustration at the top of the previous page:

The "Non Operating (Other) Expenses" row is the complement of the Non Operating (Other) Income in the first part of the cash flow. These are expenses outside of normal operations. They are there to accommodate companies that have "Other Expenses" sections in their normal accounting statements. You know who you are, and if this isn't you, it doesn't affect you.
There is a row for spending related to sales tax and value-added tax (VAT), which is money a company holds because it collects it for the government, but which must, in turn, be repaid. Normal cash flow tracks these tax-related amounts as they enter and leave the company.
The next three rows, "Principal Repayment of Current Borrowing," "Other Liabilities Principal Repayment," and "Long-term Liabilities Principal Repayment" are for principal repayments of debt. When you pay off your loans, you lose cash. In the example, there is a regular payoff of $3,000 long-term debt, and a single pay off of $90,000 of the current (short-term) debt.
In the third row from the bottom, you record the purchase of new Other Current Assets. You'll have to know how much you purchase in new assets in order to estimate your Balance Sheet. While in real life these might also be recorded as Accounts Payable and paid a few weeks later, we make them explicit here as if they were paid immediately in cash. That makes for better cash planning.
Logically, this next row is one for purchases of new Long-term Assets. These also reduce cash.
The last row in spending tracks dividends. Dividends are the distribution of profits to owners and investors. They reduce cash but don't appear anywhere else.

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