From the course: Financial Accounting Foundations
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The statement of cash flows
From the course: Financial Accounting Foundations
The statement of cash flows
- The statement of cash flows or cash flow statement is the report of the amount of cash collected and cash paid. The structure of the statement of cash flows is to separate the cash flows into three categories. Operating activities are the things that you do every single day, your operations. For example, Walmart collects cash from its operating activities when it collects cash from selling items to you and me. Examples of cash outflows from operating activities are cash paid for wages, for utilities, for taxes, and for interest. The next category is investing activities. Here, the word investing means investing in the productive capacity of the business. So cash outflows from investing activities are buying new buildings, buying new land, buying new machines. The third category of cash flows is financing activities. Financing activities are just what they sound like, borrowing money and getting new investment cash from…
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