Form 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

           |X| Quarterly Report Pursuant to Section 13 or 15(d) of the
               Securities Exchange Act of 1934.
               For the quarterly period ended September 30, 1996

           |_| Transition Report Pursuant to Section 13 or 15(d) of
               the Securities Exchange Act of 1934.
               For the transition period from _______ to _______

                        Commission File Number 000-21552

                      ATEL Cash Distribution Fund IV, L.P.
             (Exact name of registrant as specified in its charter)

        California                                                 94-3145429
(State or other jurisdiction of                              (I. R. S. Employer
 incorporation or organization)                              Identification No.)

           235 Pine Street, 6th Floor, San Francisco, California 94104
                    (Address of principal executive offices)

        Registrant's telephone number, including area code: (415)989-8800



Indicate  by a check  mark  whether  the  registrant  (1) has filed all  reports
required to be filed by section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

                                     Yes |X|
                                     No |_|

                       DOCUMENTS INCORPORATED BY REFERENCE

                                      None


                                  Page 1 of 16

<PAGE>

                          Part I FINANCIAL INFORMATION

Item 1.                       Financial Statements.











                                     Page 2
<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                                 BALANCE SHEETS

                    SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
                                   (Unaudited)


                                     ASSETS

                                                    1996              1995
                                                    ----              ----
Cash and cash equivalents                            $563,565        $1,355,258

Accounts receivable                                   610,284           682,207

Notes receivable                                       33,755           135,022

Investment in leases                               55,850,615        63,967,204
                                              ---------------- -----------------
                                                  $57,058,219       $66,139,691
                                              ================ =================


                        LIABILITIES AND PARTNERS' CAPITAL


Non-recourse debt                                 $22,216,345       $25,298,767
Lines of credit                                     1,000,000                 -
Accounts payable:
   General Partner                                    265,393           216,347
   Equipment purchases                                      -            42,227
   Other                                              267,963           201,642
Accrued interest                                      116,390           123,629
Deposit due to lessee                                 126,318           984,213
Unearned operating lease income                       289,918           413,106
                                              ---------------- -----------------
Total liabilities                                  24,282,327        27,279,931

Partners' capital:
     General Partner                                   61,755            44,831
     Limited Partners                              32,714,137        38,814,929
                                              ---------------- -----------------
Total partners' capital                            32,775,892        38,859,760
                                              ---------------- -----------------
                                                  $57,058,219       $66,139,691
                                              ================ =================

                             See accompanying notes.


                                     Page 3

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                                INCOME STATEMENTS

                       NINE AND THREE MONTH PERIODS ENDED
                           SEPTEMBER 30, 1996 AND 1995
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                  Nine Months Ended                  Three Months Ended
                                                    September 30,                       September 30,
Revenues:                                     1996               1995             1996              1995
Lease revenues:
<S>                                          <C>                <C>              <C>               <C>       
   Operating                                 $7,853,459         $8,763,057       $2,665,750        $2,965,288
   Direct financing                             927,152            684,979          333,657           227,613
   Leveraged                                    141,398            146,187           47,132            48,729
   Gain on sales of assets                    1,221,635            507,971          431,245           452,374
Other                                             9,285              3,104            6,684               823
Interest income                                  17,507             44,656            5,842             8,776
                                        ----------------  ----------------- ---------------- -----------------
                                             10,170,436         10,149,954        3,490,310         3,703,603
Expenses:
Depreciation and amortization                 5,992,865          6,522,581        1,945,759         2,211,022
Interest                                      1,389,409          1,432,634          402,743           514,790
Management fees                                 793,726            656,026          310,428           130,326
Administrative cost reimbursements              192,711            237,528           76,017            81,959
Professional fees                                41,723             67,753           18,462            12,970
Provision for losses                            102,796            100,290           36,000            36,838
Other                                            77,399             79,038           19,011            21,075
                                        ----------------  ----------------- ---------------- -----------------
                                              8,590,629          9,095,850        2,808,420         3,008,980
                                        ----------------  ----------------- ---------------- -----------------
Income before extraordinary item              1,579,807          1,054,104          681,890           694,623
Extraordinary gain on early 
   extinguishment of debt                       112,546                  -          112,546                 -
                                        ----------------  ----------------- ---------------- -----------------
Net income                                   $1,692,353         $1,054,104         $794,436          $694,623
                                        ================  ================= ================ =================
Net income:
     General Partner                            $16,924            $10,541           $7,944            $6,946
     Limited Partners                         1,675,429          1,043,563          786,492           687,677
                                        ----------------  ----------------- ---------------- -----------------
                                             $1,692,353         $1,054,104         $794,436          $694,623
                                        ================  ================= ================ =================
Income before extraordinary item per
   limited partnership unit                       $0.21              $0.14            $0.09             $0.09
Extraordinary gain on early 
   extinguishment of debt per limited 
   partnership unit                                0.01                  -             0.01                 -
                                        ----------------  ----------------- ---------------- -----------------
Net income per Limited Partnership unit           $0.22              $0.14            $0.10             $0.09
                                        ================  ================= ================ =================
Weighted average number of units 
   outstanding                                7,487,350          7,492,550        7,487,850         7,493,883
                                        ================  ================= ================ =================
</TABLE>

                             See accompanying notes.

                                     Page 4

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                    STATEMENT OF CHANGES IN PARTNERS' CAPITAL

                             NINE MONTH PERIOD ENDED
                               SEPTEMBER 30, 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Limited Partners             General
                                               Units             Amount           Partner           Total
                                               -----             ------           -------           -----
<S>                                            <C>              <C>                  <C>           <C>        
Balance December 31, 1995                      7,488,850        $38,814,929          $44,831       $38,859,760
Distributions to limited partners                                (7,773,292)               -        (7,773,292)
Repurchase of limited partnership units           (1,500)            (2,929)               -            (2,929)
Net income                                                        1,675,429           16,924         1,692,353
                                         ----------------  ----------------- ---------------- -----------------
Balance September 30, 1996                     7,487,350        $32,714,137          $61,755       $32,775,892
                                         ================  ================= ================ =================
</TABLE>












                             See accompanying notes.

                                     Page 5

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                            STATEMENTS OF CASH FLOWS

                       NINE AND THREE MONTH PERIODS ENDED
                               SEPTEMBER 30, 1996
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Nine Months Ended                  Three Months Ended
                                                                     September 30,                       September 30,
                                                                1996               1995             1996              1995
                                                                ----               ----             ----              ----
<S>                                                            <C>                <C>                <C>               <C>     
Operating activities:
Net income                                                      $1,692,353         $1,054,104         $794,436          $694,623
Adjustments to reconcile net income to
   net cash provided by operations:
     Depreciation and amortization                               5,992,865          6,522,581        1,945,759         2,211,022
     Leveraged lease income                                       (141,398)          (146,187)         (47,132)          (48,729)
     Gain on sales of assets                                    (1,221,635)          (507,971)        (431,245)         (452,374)
     Provision for losses                                          102,796            100,290           36,000            36,838
     Extraordinary gain on early extinguishment of
        non-recourse debt                                         (112,546)                 -         (112,546)                -
Changes in operating assets and liabilities:
   Accounts receivable                                              71,923           (181,033)         (88,738)         (201,619)
   Accounts payable, General Partner                                49,046           (995,630)         108,625          (129,120)
   Accounts payable, other                                          66,321             22,528          153,115           (77,251)
   Accrued interest                                                 (7,239)            16,837          (24,604)           26,319
   Deposits due to lessees                                        (857,895)                 -          (86,871)                -
   Unearned operating lease income                                (123,188)          (154,774)         (27,743)         (214,985)
                                                           ----------------  ----------------- ---------------- -----------------
Net cash from operations                                         5,511,403          5,730,745        2,219,056         1,844,724
                                                           ----------------  ----------------- ---------------- -----------------

Investing activities:
Purchase of equipment on operating leases                         (199,481)        (7,764,150)       1,370,272          (439,312)
Purchase of equipment on direct financing leases                (2,274,344)        (1,068,937)      (1,375,395)         (452,630)
Purchase of residual value interests                                     -           (175,974)               -                 -
Reduction of net investment in direct financing leases           2,183,351          1,541,829          463,883           525,878
Reduction of net investment in leveraged leases                     16,725            397,764            3,718             4,462
Proceeds from sales of lease assets                              3,615,483          2,244,191        1,463,263         1,845,427
Payments of initial direct costs to General Partner                      -           (258,268)               -           (21,404)
Principal payments received on notes receivable                    101,267            101,266           33,756            33,756
Initial direct costs paid to others                                      -            (64,940)               -                 -
                                                           ----------------  ----------------- ---------------- -----------------
Net cash (used in) provided by investing
   activities                                                    3,443,001         (4,982,279)       1,959,497         1,496,177
                                                           ----------------  ----------------- ---------------- -----------------
</TABLE>


                                     Page 6
<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                            STATEMENTS OF CASH FLOWS
                                   (CONTINUED)

                       NINE AND THREE MONTH PERIODS ENDED
                               SEPTEMBER 30, 1996

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   Nine Months Ended                  Three Months Ended
                                                                     September 30,                       September 30,
                                                                1996               1995             1996              1995
                                                                ----               ----             ----              ----
<S>                                                             <C>                <C>              <C>               <C>      
Financing activities:
Proceeds of non-recourse debt                                    2,847,801          7,851,380        2,847,801         7,851,380
Repayment of non-recourse debt                                  (5,817,677)        (4,815,053)      (2,650,037)       (3,167,088)
Borrowings under lines of credit                                 4,000,000          3,798,001        1,500,000                 -
Repayments of lines of credit                                   (3,000,000)        (2,600,000)      (3,000,000)       (2,600,000)
Distributions to limited partners                               (7,773,292)        (7,302,706)      (2,623,777)       (2,433,918)
Repurchase of units                                                 (2,929)           (15,501)               -                 -
Payment of syndication costs                                             -             (5,368)               -                 -
                                                           ----------------  ----------------- ---------------- -----------------

Net cash used in financing activities                           (9,746,097)        (3,089,247)      (3,926,013)          (349,626)
                                                           ----------------  ----------------- ---------------- -----------------
Net increase (decrease) in cash and cash
   equivalents                                                    (791,693)        (2,340,781)         252,540         2,991,275
Cash and cash equivalents at beginning of
   period                                                        1,355,258          7,152,081          311,025         1,820,025
                                                           ----------------  ----------------- ---------------- -----------------
Cash and cash equivalents at end of period                        $563,565         $4,811,300         $563,565        $4,811,300
                                                           ================  ================= ================ =================




Supplemental disclosures of cash flow information:

Cash paid for interest                                          $1,396,648         $1,415,797         $427,347          $488,471
                                                           ================  ================= ================ =================

Supplemental disclosure of non-cash transactions:

Gain on extinguishment of non-recourse debt                       $112,546                            $112,546
                                                           ================                    ================
</TABLE>





                             See accompanying notes.

                                     Page 7
<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


1.  Interim financial statements:

The unaudited interim financial statements reflect all adjustments which are, in
the opinion of the general partners,  necessary to a fair statement of financial
position and results of operations for the interim periods  presented.  All such
adjustments are of a normal recurring nature.  These unaudited interim financial
statements  should be read in  conjunction  with the most recent  report on Form
10K.

2. Investment in leases:

The Partnership's investment in leases consists of the following:

<TABLE>
<CAPTION>
                                                                               Depreciation
                                                                                Expense or        Reclass-
                                         December 31,                          Amortization     ifications &     September 30,
                                             1995             Additions         of Leases       Dispositions          1996
                                             ----             ---------         ---------       ------------          ----
<S>                                          <C>                 <C>               <C>              <C>               <C>        
Net investment in operating
   leases                                    $45,593,701           $157,254        ($5,564,936)     ($4,079,923)      $36,106,096
Net investment in direct
   financing leases                           11,948,261          2,274,344         (2,183,351)         835,994        12,875,248
Net investment in leveraged
   leases                                      4,675,926                  -            124,673                -         4,800,599
Equipment held for sale or lease                       -                  -            (11,949)         305,955           294,006
Residual value interests                         610,878                  -                  -                -           610,878
Initial direct costs, net of
   accumulated amortization of
   $1,318,238 in 1995 and
   $1,460,180 in 1996                          1,852,577                  -           (415,980)               -         1,436,597
Reserve for losses                              (714,139)          (102,796)                 -          544,126          (272,809)
                                      ------------------- ------------------  ----------------- ---------------- -----------------

                                             $63,967,204         $2,328,802        ($8,051,543)     ($2,393,848)      $55,850,615
                                      =================== ==================  ================= ================ =================
</TABLE>

                                     Page 8
<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


2. Investment in lease assets (continued):

At September 30, 1995, equipment on operating leases consists of the following:

<TABLE>
<CAPTION>
                                            Balance                                                                 Balance
                                         December 31,      Acquisitions, Dispositions & Reclassifications        September 30,
                                             1995            1st Quarter       2nd Quarter     3rd Quarter            1996
                                             ----            -----------       -----------     -----------            ----
<S>                                           <C>              <C>                  <C>              <C>             <C>        
Transportation                                $24,984,962      ($1,847,200)         ($210,277)       ($545,047)      $22,382,438
Corporate aircraft                              9,635,969                -                  -                -         9,635,969
Printing                                        5,523,249                -                  -                -         5,523,249
Construction equipment                          4,985,297                -                  -                -         4,985,297
Other                                           4,726,040                -                  -                -         4,726,040
Mining                                          6,570,460                -         (2,222,500)               -         4,347,960
Materials handling                              3,915,999                -                  -                -         3,915,999
Ground support equipment                        1,127,988                -                  -                -         1,127,988
Data processing                                   694,308          157,254                  -                -           851,562
Manufacturing                                   1,587,670                -                  -       (1,130,000)          457,670
Office equipment                                  216,080                -                  -                -           216,080
Furniture and fixtures                          2,353,608                -                  -       (2,353,608)                -
                                      -------------------- ----------------  ----------------- ---------------- -----------------
                                               66,321,630       (1,689,946)        (2,432,777)      (4,028,655)       58,170,252
Accumulated depreciation                      (20,727,929)        (790,028)          (218,066)        (328,133)      (22,064,156)
                                      -------------------- ----------------  ----------------- ---------------- -----------------
                                              $45,593,701      ($2,479,974)       ($2,650,843)     ($4,356,788)      $36,106,096
                                      ==================== ================  ================= ================ =================
</TABLE>

All of the equipment on operating  leases was acquired during 1992,  1993, 1994,
1995 and 1996.

At September 30, 1996,  the aggregate  amounts of future  minimum lease payments
are as follows:

<TABLE>
<CAPTION>
                                                                 Direct
                                              Operating         Financing           Total
                                              ---------         ---------           -----
<S>                                          <C>                <C>              <C>       
 Three months ending December 31, 1996       $2,579,070         $1,092,317       $3,671,387
         Year ending December 31, 1997        8,783,188          4,010,850       12,794,038
                                  1998        6,993,866          3,536,444       10,530,310
                                  1999        6,142,265          2,390,141        8,532,406
                                  2000        2,547,270          1,410,221        3,957,491
                            Thereafter        3,790,590          1,256,433        5,047,023
                                        ----------------  ----------------- ----------------
                                            $30,836,249        $13,696,406      $44,532,655
                                        ================  ================= ================
</TABLE>




                                     Page 9

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


4. Non-recourse debt:

Notes payable to financial  institutions are due in varying  monthly,  quarterly
and semi-annual installments of principal and interest. The notes are secured by
assignments  of lease  payments and pledges of the assets  which were  purchased
with the proceeds of the particular notes. Interest rates on the notes vary from
7.04% to 13.3%.

Future minimum principal  payments of non-recourse debt as of September 30, 1996
are as follows:

<TABLE>
<CAPTION>
                                             Principal          Interest           Total
                                             ---------          --------           -----
<S>                                         <C>                   <C>            <C>       
 Three months ending December 31, 1996      $1,765,4246           $443,276       $2,208,700
     Year ending December 31, 1997            5,828,339          1,425,131        7,253,470
                              1998            5,167,306            992,328        6,159,634
                              1999            5,055,577            585,451        5,641,028
                              2000            2,324,358            276,272        2,600,630
                        Thereafter            2,075,341            160,506        2,235,847
                                        ----------------  ----------------- ----------------
                                            $22,216,345         $3,882,964      $26,099,309
                                        ================  ================= ================
</TABLE>


5.  Related party transactions:

The terms of the  Agreement  of Limited  Partnership  provide  that the  General
Partners  and/or  Affiliates are entitled to receive  certain fees for equipment
acquisition, management and resale and for management of the Partnership.

The  General   Partners  and/or   Affiliates   earned  the  following  fees  and
commissions, pursuant to the Agreement of Limited Partnership as follows:

                                                    1996              1995
                                                    ----              ----
Incentive and equipment management fees              $793,726          $656,026
Administrative cost reimbursements                    192,711           237,528
                                              ---------------- -----------------
                                                     $986,437          $893,554
                                              ================ =================

                                    Page 10

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


6. Partner's capital:

The Fund is  authorized  to issue up to 7,500,000  Units of Limited  Partnership
interest in addition to the Initial Limited Partners.

The Fund's Net Profits,  Net Losses and Tax Credits are to be  allocated  99% to
the Limited Partners and 1% to the General Partner.

As more  fully  described  in the  Partnership  Agreement,  available  Cash from
Operations and Cash from Sales or Refinancing shall be distributed as follows:

     First, 5% of  Distributions  of Cash from Operations to the General Partner
as Incentive Management Fees.

     Second, the balance to the Limited Partners until the Limited Partners have
          received aggregate  Distributions,  as defined,  in an amount equal to
          their  Original  Invested  Capital,  as defined,  plus a 10% per annum
          cumulative  (compounded  daily)  return  on  their  Adjusted  Invested
          Capital, as defined.

     Third,the General  Partner will receive as Incentive  Management  Fees, the
           following: (A) 10% of remaining Cash from Operations, as defined, (B)
           15% of remaining Cash from Sales or Refinancing, as defined.

     Fourth, the balance to the Limited Partners.


7.  Line of credit:

The  Partnership  participates  with the  General  Partner  and  certain  of its
affiliates  in  a  $70,000,000   revolving  line  of  credit  with  a  financial
institution. The line of credit expires on July 18, 1997.

The facility, when used by the Partnership,  is collateralized by (i) leases and
equipment  owned by the Partnership and financed by the lines and (ii) all other
assets owned by the Partnership  except  equipment,  lease receipts and residual
values specifically pledged to other equipment funding sources.




                                    Page 11

<PAGE>

                      ATEL CASH DISTRIBUTION FUND IV, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 1996
                                   (Unaudited)


8.  Extraordinary gain on extinguishment of debt:

In January 1996,  Barney's,  Inc.,  one of the  Partnership's  lessees filed for
reorganization  under  Chapter  11 of the United  States  Bankruptcy  Code.  The
Partnership  determined  that  the  assets  under  an  operating  lease  to this
particular  lessee were  impaired  as of  December  31,  1995.  The  Partnership
estimated  that only a portion of the  contractual  cash flows would be received
under the lease.  Under Financial  Accounting  Standards Board Statement No. 121
(FAS 121), the estimated cash flows were discounted at the effective rate of the
non-recourse  debt  related to the lease and the assets were written down to the
present value of those cash flows.

Assets and liabilities  related to the lease  transaction  were as follows as of
December 31, 1995:

Assets at cost                                                       $2,353,608
Accumulated depreciation                                               (900,255)
                                                               -----------------
Book value of lease assets                                            1,453,353
Deposits from lessee                                                    (86,870)
Non-recourse debt                                                    (1,212,302)
                                                               -----------------
Net assets included in the Partnership's balance sheet as of
   December 31, 1995 before provision for impairment                    154,181

Reserve for impairment                                                 (544,126)
                                                               -----------------
Excess of non-recourse debt over net assets                           ($389,945)
                                                               =================

On July 19,  1996,  the assets  subject to the lease were  purchased  by a third
party.  As  part  of the  purchase  and  transaction  restructure,  the  related
non-recourse debt was extinguished by the lender and the Partnership  received a
small amount of cash  proceeds.  The sale  resulted in a gain on the sale of the
assets and a gain on the  extinguishment of the related  non-recourse  debt. The
following summarizes this transaction:

Assets at cost                                                       $2,353,608
Accumulated depreciation at June 30, 1996                            (1,100,312)
                                                               -----------------
Book value of lease assets at June 30, 1996                           1,253,296
Reserve for impairment                                                 (544,126)
                                                               -----------------
Carrying value at June 30, 1996                                         709,170
Deposits from lessee retained by Partnership                            (86,870)
                                                               -----------------
Excess of carrying value over deposits from lessee                      622,300
Gross sales proceeds                                                  1,104,241
                                                               -----------------
Gain on sale of assets                                                 $481,941
                                                               =================

Non-recourse debt                                                    $1,212,302
Gross sales proceeds used to extinguish non-recourse debt            (1,099,756)
                                                               -----------------
Extraordinary gain on extinguishment of debt                           $112,546
                                                               =================

Gross sales proceeds                                                 $1,104,241
Gross sales proceeds used to extinguish non-recourse debt            (1,099,756)
                                                               -----------------
Net cash proceeds to Partnership                                         $4,485
                                                               =================


                                    Page 12
<PAGE>

Item 2.                       MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Capital Resources and Liquidity

The  Partnership's  primary source of liquidity  during 1996 was lease revenues.
The  liquidity of the  Partnership  will vary in the future,  increasing  to the
extent cash flows from leases exceed  expenses,  and  decreasing as lease assets
are  acquired,  as  distributions  are made to the Limited  Partners  and to the
extent expenses exceed cash flows from leases.

The Partnership currently has available adequate reserves to meet contingencies,
but in the event those  reserves were found to be  inadequate,  the  Partnership
would  likely be in a position to borrow  against its current  portfolio to meet
such  requirements.  The General  Partner  envisions  no such  requirements  for
operating purposes.

As  of  September  30,  1996,  the   Partnership   had  borrowed   approximately
$40,280,000,  with a  remaining  unpaid  balance of  approximately  $22,216,000.
Borrowings are to be non-recourse to the Partnership, that is, the only recourse
of the lender  will be to the  equipment  or  corresponding  lease  acquired  or
secured with the loan  proceeds.  The General  Partner  expects  that  aggregate
borrowings in the future will be approximately 40% of aggregate  equipment cost.
In any event, the Agreement of Limited Partnership limits such borrowings to 40%
of the total cost of equipment, in aggregate.

The  Partnership  participates  with the  General  Partner  and  certain  of its
affiliates  in  a  $70,000,000   revolving  line  of  credit  with  a  financial
institution. The line of credit expires on July 18, 1997.

The facility, when used by the Partnership,  is collateralized by (i) leases and
equipment  owned by the Partnership and financed by the lines and (ii) all other
assets owned by the Partnership  except  equipment,  lease receipts and residual
values specifically pledged to other equipment funding sources.

No  commitments  of capital  have been or are expected to be made other than for
the  acquisition  of  additional  equipment.  As of  September  30,  1996,  such
commitments totaled $80,000.

If  inflation  in the general  economy  becomes  significant,  it may affect the
Partnership  inasmuch as the residual  (resale) values and rates on re-leases of
the  Partnership's  leased  assets may  increase as the costs of similar  assets
increase.  However,  the  Partnership's  revenues from existing leases would not
increase,  as such rates are generally fixed for the terms of the leases without
adjustment for inflation.

If interest rates increase  significantly,  the lease rates that the Partnership
can obtain on future  leases will be expected to increase as the cost of capital
is a significant  factor in the pricing of lease  financing.  Leases  already in
place, for the most part, would not be affected by changes in interest rates.

1996 vs. 1995:
Nine months:

During the first nine months of 1996,  operating lease revenues were the primary
source of operating cash flows. Total lease revenues decreased by $672,214.

In 1996 and 1995, the proceeds from the sales of assets was the most significant
source cash flows from investing  activities.  Proceeds from asset sales and the
use of cash for asset  acquisitions  are not comparable to prior periods nor are
they expected to be comparable to future periods.

In 1996 and 1995,  proceeds from non-recourse debt and borrowings under the line
of credit were the only  sources of financing  cash flows.  The proceeds of debt
are used to purchase lease assets and as such, are not expected to be comparable
from one period to another.  Cash used to repay  non-recourse debt has increased
due to both scheduled and unscheduled  debt  reductions.  (See discussion  below
regarding the Barney's, Inc. lease transaction and the related extinguishment of
debt  under the  caption  "Results  of  Operations".)  Distributions  to Limited
Partners have increased due to the higher per Unit  distribution rate commencing
in February 1994.

                                    Page 13
<PAGE>

Three months:

The  primary  source of cash from  operations  for the third  quarter  was lease
rents.  Lease rents have decreased from the prior year due to asset sales during
the preceding twelve months.

The investing  sources of cash in 1995 were the same as noted above for the nine
month period. Amounts of cash used for purchases of assets is not comparable nor
is it expected to be comparable from one period to another.

In 1996, proceeds from non-recourse debt and borrowings under the line of credit
were the Partnership's  only financing  sources of cash. In 1995,  proceeds from
non-recourse  debt was the only source of financing  cash flows.  As noted above
for the nine month period,  these amounts are not expected to be comparable from
one period to another.  Distributions to Limited Partners have increased for the
reasons noted above for the nine month period.


Results of Operations

Operations  in 1996  resulted  in net  income of  $1,692,353  for the nine month
period and $794,436 for the three month period. In 1995,  operations resulted in
net income of  $1,054,104  for the nine month  period and $694,623 for the three
month period.

1996 vs. 1995:

Operating lease revenues have decreased due to sales of leased assets during the
last twelve months.

Effective  January 1, 1996, the Partnership  suspended the recognition of income
under its lease  with  Barney's,  Inc.  The  non-recourse  debt  related to this
transaction was also put in a non-accrual  status, that is, interest expense was
no longer accrued. In July 1996, the underlying assets were sold to an unrelated
third party and the related debt was  extinguished as a part of the transaction.
The Partnership recorded a gain on the sale of the assets of $481,942.  The sale
resulted  in the debt  being  extinguished  for less than its  carrying  amount,
resulting in an extraordinary gain of $112,546.

The non-accrual of lease revenues on the Barney's lease contributed  $370,485 to
the decline in operating lease revenues over the nine month period ($123,495 for
the three month period).

Depreciation  and  amortization  expenses are directly related to the amounts of
leased assets and have also  decreased  from 1995 to 1996.  Management  fees are
related to the amounts of lease revenues and  distributions to Limited Partners.
In 1995, a larger part of the distributions  were from sales proceeds,  on which
no fees are currently paid. Other expenses have not changed  significantly  from
1995 to 1996 for the nine month period.




                                    Page 14
<PAGE>

                            PART II OTHER INFORMATION

Item 1.                       LEGAL PROCEEDINGS.

                               Inapplicable.

Item 2.                       CHANGES IN SECURITIES.

                               Inapplicable.

Item 3.                       DEFAULTS UPON SENIOR SECURITIES.

                               Inapplicable.

Item 4.                       SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                              HOLDERS.

                               Inapplicable.

Item 5.                       OTHER INFORMATION.

                               Inapplicable.

Item 6.                       EXHIBITS AND REPORTS ON FORM 8-K.

                          (a) Documents filed as a part of this report
                            1. Financial Statements
                               Included in Part I of this report:

                               Balance  Sheets,  September 30, 1996 and December
31, 1995.

                               Income  statements  for the nine and three  month
                               periods ended September 30, 1996 and 1995.

                               Statement of changes in partners'  equity for the
                               nine month period ended September 30, 1996.

                               Statements  of cash  flows for the nine and three
                               month periods ended September 30, 1996 and 1995.

                               Notes to the Financial Statements

                            2. Financial Statement Schedules
                               All other  schedules for which  provision is made
                               in the applicable  accounting  regulations of the
                               Securities   and  Exchange   Commission  are  not
                               required  under the related  instructions  or are
                               inapplicable, and therefore have been omitted.

                          (b)  Report on Form 8-K
                               None

                                    Page 15

<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

Date:
November 11, 1996

                      ATEL CASH DISTRIBUTION FUND IV, L.P.
                                  (Registrant)



                                  By: ATEL Financial Corporation
                                      General Partner of Registrant




                            By:   /s/   A. J. BATT
                               -----------------------------------
                               A. J. Batt
                               President and Chief Executive Officer
                               of General Partner




                            By:   /s/  DEAN L. CASH
                               -----------------------------------
                               Dean L. Cash
                               Executive Vice President
                               of General Partner




                                  By:  /s/  F. RANDALL BIGONY
                                      ---------------------------------------
                                      F. Randall Bigony
                                      Principal financial officer of
                                      registrant




                                  By:  /s/  DONALD E. CARPENTER
                                      ---------------------------------------
                                      Donald E. Carpenter
                                      Principal accounting officer of
                                      registrant


                                    Page 16