Yayınlanma Tarihi: 02.11.2018
Cash Flow and Reporting Understanding the Cash Flow Statement How to Use a Cash Flow Statement The Structure of the Cash Flow Statement Cash From Operating Activities How Cash Flow Is Calculated Cash From Investing Activities Cash From Financing Activities Example of a Cash Flow Statement Negative Cash Flow Statement Balance Sheet and Income Statement The Bottom Line The statement of cash flows, or the cash flow statement, is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. The cash flow statement (CFS) measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. The cash flow statement complements the balance sheet and income statement and is a mandatory part of a company's financial reports since 1987.1 In this article, we'll show you how the CFS is structured, and how you can use it when analyzing a company. KEY TAKEAWAYS A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. The cash flow statement measures how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating expenses. The cash flow statement complements the balance sheet and income statement and is a mandatory part of a company's financial reports since 1987.1 The main components of the cash flow statement are cash from operating activities, cash from investing activities, and cash from financing activities. The two methods of calculating cash flow are the direct method and the indirect method. How to Use a Cash Flow Statement The CFS allows investors to understand how a company's operations are running, where its money is coming from, and how money is being spent. The CFS is important since it helps investors determine whether a company is on a solid financial footing. Creditors, on the other hand, can use the CFS to determine how much cash is available (referred to as liquidity) for the company to fund its operating expenses and pay its debts. The Structure of the Cash Flow Statement The main components of the cash flow statement are: Cash from operating activities Cash from investing activities Cash from financing activities Disclosure of noncash activities is sometimes included when prepared under the generally accepted accounting principles (GAAP).2 It's important to note that the CFS is distinct from the income statement and balance sheet because it does not include the amount of future incoming and outgoing cash that has been recorded on credit. Therefore, cash is not the same as net income, which on the income statement and balance sheet includes cash sales and sales made on credit. Cash From Operating Activities The operating activities on the CFS include any sources and uses of cash from business activities. In other words, it reflects how much cash is generated from a company's products or services. Generally, changes made in cash, accounts receivable, depreciation, inventory, and accounts payable are reflected in cash from operations. These operating activities might include: Receipts from sales of goods and services Interest payments Income tax payments Payments made to suppliers of goods and services used in production Salary and wage payments to employees Rent payments Any other type of operating expenses In the case of a trading portfolio or an investment company, receipts from the sale of loans, debt, or equity instruments are also included. When preparing a cash flow statement under the indirect method, depreciation, amortization, deferred tax, gains or losses associated with a noncurrent asset, and dividends or revenue received from certain investing activities are also included. However, purchases or sales of long-term assets are not included in operating activities.