This workout asks us to complete the table at the bottom from the financial statement extracts given In particular it asks us to identify capital expenditure, identify non cash items (from the cash flow statement) and to identify depreciation and amortization from the footnotes Now identifying capex and depreciation and amortization; very useful for a number of things that you might want to do when looking at the performance of a company We might want to forecast the PP&E, in which case really useful for me to find capital expenditure and depreciation and amortization I might want to look at some performance metrics such as how old are the company's assets are So trying to find these figures and finding them accurately, always important Let's go down and have a look at this table So capital expenditure we need to find, non cash items from the cash flow statements And then D & A individually and then add them up So let's start with capital expenditure Well we've got an extract from a cash flow statement here, a cash flow statement always has 3 sections, being operating, investing and financing Now we've got two of them here, operating and investing I know that capital expenditure is always an investment into the operations into the business And because it's an investing cash flow, it will be within the investing activities So here's our investing activities section and the top line there, capital expenditure I can see the figure is 3914 in the left most common So let's put those figures straight into our table So capital expenditure 3914 and for year 1, 4928 Next up, it asks us to look for non cash items from the cash flow statement So back up to the cash flow statement. Again, I need to think which of the three sections of the cash flow statement will I find non cash items in? It's always going to be in the operating section Your cash flow statement starts off with some kind of profit from the income statement Here it starts off with operating profit And then the company says "oops, sorry that includes some non cash items" My operating profit has got some non cash items in there I shouldn't include them in cash flow statement by definition Non cash items should not be in a cash flow statement So if they were non cash expenses, we need to add them back So that's the next line down, correcting our mistake, adding back the non cash items Now for the majority of companies, this non cash item is going to be depreciation and amortization But I want to investigate that 6,323 in year 2 in more detail So if I just go down to my table very quickly, we'll just fill in those figures that we found 6,432 and in year 1, 4,352. But I want to investigate the 6,323 So here's my footnote and I can see, there's the 6,323 as a sub total And there's the detail of what's gone into it I'm expecting to see depreciation and amortization and there at the very top "Depreciation of property, plant and equipment" and the fourth one down, "Amortization of intangible assets" But there's an awful lot of other items in there that perhaps I wasn't expecting Impairment, impairment, another impairment, disposal of business and asset You've got non cash items in financial assets and liabilities, equity compensation plans So that's paying your staff using shares or options and other So the non cash items here are quite varied Remember, I'm just after depreciation and amortization, so let's focus on those two There's our two depreciation figures and our two amortization figures I can now total up my depreciation and amortization (it's the sum of the two cells above) And I've now finished my table So remember guys, do be careful! Don't just go straight to the cash flow statement looking for depreciation and amortization. Try and find the figures in the footnotes as well And make sure you're not accidentally including maybe some impairments