Cash Flow Statement Explained: Basic Cash Flow Statement Tutorial
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Cash Flow Statement Tutorial:
Straightforward but Comprehensive Cash Flow Statement Explanation
This tutorial into the Statement of Cash Flows includes:
* Introduction to, and the benefits of, the Cash Flow Statement
* Guides into Each Section of the Cash Flow Statement, inc. possible interpretations of results
* Examples of a Direct Cash Flow Statement & an Indirect Cash Flow Statement
So what is the cash flow statement? It is one of the four main financial statements produced by a business. Simply, it tells us about cash inflows and outflows of a business over a length of time. Further, it categorises cash flows into particular business activities.
A standard cash flow statement will show a net change in cash over the period. It may only show this net change or it may show a cash starting balance, an ending balance and thus also the resulting net change.
This net change in cash is also broken down into three main (and standard) categories. These are cash flow from operating activities, cash flow from investing activities and cash flow from financing activities.
Cash Flow from Financing Activities:
From latter to first; cash flow from financing activities displays all cash inflows and outflows that have to do with how the business is financed. That is, how it raises cash from external parties to fund the business (inflows) and how it then returns cash to those who funded the business (outflows).
Cash Flow from Investing Activities:
In the second section, cash flow from investing activities, details of all cash inflows and outflows are outlined in respect to investments and sales of non-current assets. These are the long-term assets of the business that normally generate the income of the business.
Cash Flow from Operating Activities:
This section of the cash flow statement details the nuts and bolts of the business. That is, this section outlines cash inflows and outflows of the day-to-day operations of the business. For example, if the statement is for a bookstore, then the cash flow from operations would detail money coming in and out in the process of actually selling books. You could contrast this with selling shares to raise the cash to open a bookstore (cash flow from financing activities) and spending funds on buying a retail space to sell books (cash flow from investing activities).
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9 سال پیش
در تاریخ 1395/02/02 منتشر شده
است.
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