Cash flow statement

Cash flow statement is a financial stuation changing statement according from the cash as the basic. It reflects the cash inflow and outflow within a certain period. It shows the ability of gainning cash and cash equivalents. And controlling the cash flow more effeciently can improve the performance of enterprise.

The cash flow can be classified into: operating cash flow, investing cash flow and financing cash flow.

Net cash flow from operating activities represents the net increase of decrease in cash form the operations. There are two methods to report the net cash flow from operating activities: the direct and indirect method of cash flow. Net cash flow from investing activities includes: that paid and received for property, plant and equipment and other non-current assets, interest and dividends received on investments. Net cash flow from financing activities comprise receipts or repayments of principal from or to external providers of finance.

The cash flow statement is very important in the financial statements. Because the cash flow is very, very important in the company. As known, the condition of bankrupt is not how much of your liabilities, but it’s that you can redeem the liabilities or not on time. That means cash flow statement shows your cash flow condition.

Here, there is a sample cash flow statement.

Cash flow statement is one of basic important financial statements. When you’re learning how to prepare the cash flow statement, you should know how to analyse the cash flow at the same time. You need analyse synthetically balance sheet, income statment, accounting policies and explanatory notes to analyse the operational situation of the company. And you’ll know how to control the finance of the company, how to improve the performance, the operation efficiency and the management of the enterprise.