In this chapter, you learned that companies prepare a statement of cash fl ows in order to keep track of their sources and uses of cash and to help them plan for their future cash needs. Planning for your own short- and long-term cash needs is every bit as important as it is for a company. LO11 Instructions Read the article “Financial ’Uh-oh’? No Problem,” at www.fool.com/personal-fi nance/

saving/fi nancial-uh-oh-no-problem.aspx, and answer the following questions.

(a) Describe the three factors that determine how much money you should set aside for short-term needs.

(b) How many months of living expenses does the article suggest to set aside?

(c) Estimate how much you should set aside based upon your current situation. Are you closer to Cliff’s scenario or to Prudence’s?

FASB CODIFICATION ACTIVITY