From the course: Finance Foundations
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The statement of cash flows
- The third primary financial statement is the statement of cash flows. The statement of cash flows is the baby of the financial statements. The balance sheet and the income statement, they've been around for over 500 years. The statement of cash flows, about 30 years. Now, the statement of cash flows is just what its name says, it's a statement of cash flows. The statement contains a report of cash in and cash out separated into three categories, operating activities, investing activities, and financing activities. Now, operating activities are those things that a company does every single day, collecting cash from customers, paying cash to employees, paying cash for rent, paying cash for utilities. Investing activities involve investing in the productive capacity of the business. Investing activities are things that you do occasionally. Occasionally you invest in the productive capacity of the business. You buy new buildings, you buy new machines, and occasionally you sell old…
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