Cash Flow Statement

Defination :

                The Cash Flow Statement is one of the financial statements. It explains that how a company’s cash and cash equivalents have changed during a specific time period .

Methods of Cash flow statement:

There are 2 basic methods to make cash flow statements;

• Direct Method.
• Indirect Method.        

Classification of cash flow statement:

.

• Operating Activities

• Investing Activities

• Financing Activities

                                 Operating Activities

  In Operating Activities

 . Cash effects of transactions that create revenues and expenses
 . Enter into the determination of net income

 Cash Inflows and outflow in operating activity :

  Inflow:

.From sale of goods and services

.from interest and dividend received

  Cash Outflows:

. To supplier for inventory

. To employees for services

. To Govt for taxes

. To lenders for interest

. To others for expenses

                       Investing Activities

Investing Activities includes:

. Purchasing and disposing of investments and productive long lived assets using cash

. Lending money and collecting the loans

  Cash Inflows and outflow in Investing activity :

Cash Inflows:

. From Sale of Property,Plant and Equipment.

. From sale f investments in debt or equity securities of other types

. From collection of principle on loans to other entities

Cash Outflows:

. To purchase Property, Plant and equipment

. To purchase investments in debt or equity securities of other tyes

. To make Loans

                             Financing Activities:

Financing activities includes.

.Obtaining cash from issuing debt and repaying the amounts borrowed

.Obtaining cash from stockholders, repurchasing shares and paying dividends.

 Cash inflow and outflow in Financing Activities

 Cash Inflows:

. From sale of equity securities

. From issuance of debts

Cash Outflows:

. To stockholders as dividends

. To redeem longterm debt or reaquire capital stock