This question has been deleted and is no more available to answer.
0
how we can describe the three section of the cash flow statement ???

Share using link:

Direct share:

Jun 6 at 10:56:15
Muhammadbilal
Muhammadbilal
15

1 Answer

0
Operating, Investing and Financing Activities

The basic cash flow statement sets out to show cash movements during the accounting period.
The cash flow statement is split into three sections, operating activities, investing activities, and financing activities. Each section deals with a particular type of cash flow as follows:

Operating cash flows – generated by the main revenue producing activities of the business
Investing cash flows – result in a change to long term assets
Financing cash flows – result in a change in either equity or borrowings
Further details on each of these cash flows sections can be found in our classification of cash flows tutorial.

At the end of the cash flow statement, all of these cash flows are totalled to give a net cash flow which represents the net cash received or paid by the business during the accounting period.

The cash balance at the end of the accounting period is calculated by adding together the net cash flow and the cash balance at the start of the accounting period. The ending balance should always agree to the cash balance shown on the balance sheet of the business.

The example given above is referred to as an indirect cash flow statement an alternative method of presentation is the direct method cash flow statement which sets out to show cash receipts from sales, interest and dividends, and cash payments for expenses, interest and income tax.

Understanding the Basic Cash Flow Statement

Cash flow is the key to business survival. A business can continue for a period of time without profits but it cannot continue if the cash runs out.

The basic cashflow statement will demonstrate to suppliers and the banks that the business has sufficient resources to meet its cash requirements. Any number of people could be using your basic cashflow statement to make decisions about your business. It is important that you have an understanding of what information the cash flow statement is providing and what that information is telling you.
Jun 6 at 11:7:18
Abdul
Abdul
141
Asked
5 months ago
Viewed
58 times