Records a company's cash inflows and cash outflows over a defined period of time.

(Usually derived from the income statement and balance sheet.)

Hey, it's different!

Both the income statement and balance sheet follow the accrual basis of accounting, but the cash flow statement follows the cash basis.

Operating Cash Flow

Includes cash generated by and acquired for the daily operations of a business. Such as cash received from sale of products.

Investing Cash Flow

Includes cash used for investing in long-term assets and cash received from the sale of such investments. Such as the purchase or sale of property and debt.

Financing Cash Flow

Includes cash paid to or received from external sources such as lenders, investors, and shareholders. Such as issuance of loans and bonds.

Example of a Cash Flow Statement

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