The Cash Flow Statement Shows Sources of Cash and cash equivalents and breaks the analysis down to operating, investing, and financing activities
WHAT IS A CASH FLOW STATEMENT
WHAT IS A CASH FLOW STATEMENT In financial accounting, a WHAT IS A CASH FLOW STATEMENT, also known as statement of cash flows is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the WHAT IS A CASH FLOW STATEMENT is concerned with the flow of cash in and out of the business. As an analytical tool WHAT IS A CASH FLOW STATEMENT, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7) is the International Accounting Standard that deals with WHAT IS A CASH FLOW STATEMENTs.
WHAT IS A CASH FLOW STATEMENT and the WHAT IS A CASH FLOW STATEMENT was previously known as the flow of funds statement. The WHAT IS A CASH FLOW STATEMENT reflects a firm’s liquidity.
The statement of financial position is a snapshot of a firm’s financial resources and obligations at a single point in time, and the income statement summarizes a firm’s financial transactions over an interval of time. These two financial statements reflect the accrual basis accounting used by firms to match revenues with the expenses associated with generating those revenues. WHAT IS A CASH FLOW STATEMENT and WHAT IS A CASH FLOW STATEMENT includes only inflows and outflows of cash and cash equivalents; it excludes transactions that do not directly affect cash receipts and payments. These non-cash transactions include depreciation or write-offs on bad debts or credit losses to name a few. The WHAT IS A CASH FLOW STATEMENT is a cash basis report on three types of financial activities: operating activities, investing activities, and financing activities. Non-cash activities are usually reported in footnotes.