WHAT IS CASH FLOW STATEMENT ?
The statement of cash flows (or cash flow statement) explains the change in cash and cash equivalents during a period of time. The changes are categorized by operating, investing, and financing activities. Significant noncash transactions are also disclosed. Terms related to the statement of cash flows (SCF) include: direct method the method preferred by the FASB for preparing the SCF indirect method the method used by most companies when preparing the SCF; operating activities begins with net income which is then adjusted to the cash provided by operating activities. operating activities activities involving net income investing activities activities involving long-term assets financing activities activities involving long-term liabilities and stockholders’ equity (other than net income). other noncash transactions activities such as the exchange of stock for bonds, stock for land, and so on must be disclosed in the SCF.
The statement of cash flows (or cash flow statement) explains the change in cash and cash equivalents during a period of time. The changes are categorized by operating, investing, and financing activities. Significant noncash transactions are also disclosed. Terms related to the statement of cash flows (SCF) include: direct method the method preferred by the FASB for preparing the SCF indirect method the method used by most companies when preparing the SCF; operating activities begins with net income which is then adjusted to the cash provided by operating activities. operating activities activities involving net income investing activities activities involving long-term assets financing activities activities involving long-term liabilities and stockholders’ equity (other than net income). other noncash transactions activities such as the exchange of stock for bonds, stock for land, and so on must be disclosed in the SCF.
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