Cash flows statement is prepared to measure the cash in-flows and cash out-flows from the operating, investing and financing activities of a business during a period. Cash inflows usually arise from one of three activities – financing, operations or investing. The money coming into the business is called cash inflow, and money going out from the business is called cash outflow. This holds true for both business and personal finance.Cash flow statement has three activities –
- Operations activity
- Investing activity
- Financing activity
cash received from customer xxx
cash paid to supplier (xxx)
cash generated from operating activity xxx
income tax (xxx)
cash flow before extraordinary items xxx
extraordinary items (xxx)
net cash used/from operating activity xxx
Investing activity:
Purchase of fixed assets (xxx)
Sale of fixed assets xxx
Dividend received xxx
Cash flow from/used in investing activity xxx
Financing activities:
• Proceeds from issuing short-term or long-term debt xxx
• Payments of dividends (xxx)
• Payments for repurchase of company shares xxx
• Repayment of debt principal, including capital leases xxx
