Cash Flow Statement

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This shows the flow of cash for an accounting period. This statement is a bridge between the cash accounting method and the accrual accounting method in that it analyzes what transactions impacted cash and what were accruals.

The cash flow statement is usually divided into three sections.

Operating

  • Cash flow for day-to-day operations
  • Examples: Customer revenue, tax payments, interest, supplies purchased

Investing

  • Cash flow generated from or consumed by assets
  • Examples: Sale of a vehicle or purchase of a building

Financing

  • Cash flow in from selling stocks or bonds or borrowing
  • Cash flow out from purchasing stock back, paying out dividends, and repaying borrowed money