Cash Flow Statement

Net Cash Flow+Beginning Cash Balance=Ending Cash Balance

Definition

Records a company's cash inflows and outflows over a defined period of time. Shows where the company's cash originated, how the company used its cash, and if the company has enough cash to return its loans and continue to operate.


Example

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Sections

1) Operating Cash Flow
2) Investing Cash Flow
3) Financing Cash Flow


Methods For Calculating Net Operating Cash Flow

Direct Method: adjusting each item on the income statement from an accrual basis to a cash basis.
Indirect Method (most widely used): adding and subtracting non-cash revenues and expenses from net income.


Examples:

Inflow: issued bonds/ stock
Outflow: dividends paid


Overview

tells you how much cash the company has generated and spent over a specific period of time.