cashflow

By: Dana Angeline F. Agao

CASH FLOW STATEMENT
OBJECTIVES:




To provide information about an entity's cash receipts and cash payments during a period.
To provide information on a cash basis about its operating, investing, and financing activities. The statement of cash flows therefore reports cash receipts, cash payments, and net change in cash resulting from operating, investing, and financing activities of an enterprise during a period, in a format that reconciles the beginning and ending cash balances.

CASH FLOW STATEMENT


It is a statement showing changes in cash position of the firm from one period to another. It explains the inflows (receipts) and outflows (disbursements) of cash over a period of time. The inflows of cash may occur from sale of goods, sale of assets, receipts from debtors, interest, dividend, rent, issue of new shares and debentures, raising of loans, short-term borrowing, etc. The cash outflows may occur on account of purchase of goods, purchase of assets, payment of loans loss on operations, payment of tax and dividend, etc.

CASH FLOW STATEMENT


1.
2.
3.

A cash flow statement is comprised of the information regarding the following activities:

Operating Activities
Investing Activities
Financing Activities

Operating Activities


Involve the cash effects of transactions that enter into the de-termination of net income, such as cash receipts from sales of goods and services and cash payments to suppliers and employees for acquisitions of inventory and expenses.

OPERATING

(Generally, the following information obtained from Income Statement)
Cash inflows
From sales of goods or services.
From returns on loans (interest) and on equity securities
(dividends).
Cash outflows
To suppliers for inventory.
To government for taxes.
To lenders for interest.
To others for expenses

Investing Activities


Investing activities include transactions with assets,