cashflow Article

By: Dana Angeline F. Agao



To provide info on an entity's cash

statements and money payments throughout a period.

To provide information on a cash basis about the

operating, trading, and auto financing activities. The

statement of cash flows consequently reports cash

receipts, funds payments, and net difference in cash

caused by operating, investing, and funding

activities of your enterprise during a period, within a

format that reconciles first and ending

cash amounts.


It is just a statement demonstrating changes in cash position

from the firm from a single period to a new. It explains

the inflows (receipts) and outflows (disbursements)

of cash during time. The inflows of cash

may happen from sale for goods, sale for assets,

invoices from debtors, interest, gross, rent,

concern of new stocks and shares and debentures, raising of

loans, initial borrowing, etc . The cash

outflows may arise on account of acquiring

goods, purchase of assets, repayment of loans loss

on operations, payment of taxes and dividend, etc .


1 .

installment payments on your


A cash flow statement is comprised of the

information regarding the next activities:

Working Activities

Trading Activities

Funding Activities

Functioning Activities

Involve the cash effects of deals that enter in

into the de-termination of net income, such as

funds receipts via sales of goods and solutions and

money payments to suppliers and employees pertaining to

acquisitions of inventory and expenses.


(Generally, the following information obtained from Income Statement) Cash inflows

From product sales of goods or services.

By returns in loans (interest) and on fairness securities


Cash outflows

To suppliers for inventory.

To authorities for fees.

To lenders for interest.

To others pertaining to expenses

Investment Activities

Investing activities include orders with property,

marketable investments and credit rating instruments. The

sale of real estate, plant and equipment or perhaps

marketable investments is a money inflow. Getting

property, plant and gear or valuable

securities are viewed as as cash outflows. Loans

made to consumers for long-term use is one other

cash output. Collections by these financial loans,

however , will be cash inflows.


(Generally, the following details obtained from Equilibrium Sheet) Cash inflows

Via sale of property, plant, and equipment.

From sale of personal debt or collateral securities of other agencies.

From variety of principal in loans to other choices.

Cash outflows

To purchase real estate, plant, and equipment.

To purchase debt or perhaps equity investments of other entities.

To generate loans to other choices.

Financing Activities

Loans activities on the statement of money flows

are more identified in nature. The statements

come from borrowing money or issuing inventory. The

outflows occur each time a company repays loans,

purchases treasury inventory or pays off dividends to

stockholders. While the case to activities upon

the assertion of cash flows depend on activities

rather than genuine general journal accounts.


(Generally, the following information extracted from Balance Sheet) Cash inflows

From sale of equity investments.

From issuance of debt (bonds and notes).

Money outflows

To stockholders since dividends.

To redeem long lasting debt or perhaps reacquire capital stock

Features of Cash Flow Affirmation

1 ) It displays the actual money position provided by the

business between the two balance sheet times which

funds flow and profit and loss consideration are unable to

display. So it is vital that you make a cash flow statement if one particular

wants to know about the fluid position of the


installment payments on your It helps the corporation in effectively projecting the

future fluidity position of the company allowing

it request any deficiency in cash by arranging finance

in advance and if there is certainly excess than...