Cash flow-statement

1. Cash Flow Statement It is a statement depicting change in cash position from one period to another. It is useful to understand a. the ability of an enterprise to generate cash and cash equivalents, b. the needs of the enterprise to utilize those cash flows

3. Cash Flow Statement Definitions…: 3. Cash flows are inflows and outflows of cash and cash equivalents 4. Operating activities are the principal revenue-producing activities of the enterprise and other activities that are not investing or financing activities

4. Cash Flow Statement Definitions…: 5. Investing activities are the acquisition and disposal of long –term assets and other investments not included in cash equivalents. 6. Financing activities are activities that result in changes in the size and composition of the owner's capital (including preference share capital in the case of a coy ) and borrowings of the enterprise

6. Cash Flow Statement Cash flows from operating profit Step: 2. Adjust for changes in CA and CL + Decrease in CA + Increase in CL Adj Net profit - Increase in CA - Decrease in CL

7. Cash Flow Statement Cash flows from Investing activities a. Increase in assets is outflow b. Decrease in assets in inflow Cash flows from Financing activities: a. Increase in liabilities is inflow b. Decrease in liabilities is outflow