Statement Of Cash Flows

The cash flow statement measures how well a company manages.

Statement of cash flows. The statement of cash flows also called the cash flow statement is the fourth general purpose financial statement and summarizes how changes in balance sheet accounts affect the cash account during the accounting period. The items in the cash flow statement are not all actual cash flows but reasons why cash flow is different from profit depreciation expense depreciation expense depreciation expense is used to reduce the value of plant property and equipment to match its use and wear and tear over time. The statement of financial position is a snapshot of a firm s financial resources and obligations at a single point in time and the income statement summarizes a firm s financial transactions over an interval of time. Depreciation expense is used to better reflect the expense and value of a long term asset as it.

The cash flow statement or statement of cash flows summarizes a company s inflow and outflow of cash meaning where a business s money came from cash receipts and where it went cash paid by cash we mean both physical currency and money in a checking account. The cash flow statement is a standard financial statement used along with the balance sheet and income statement. It also reconciles beginning and ending cash and cash equivalents account balances. It is one of the main financial statements three financial statements the three financial statements are the income statement the balance sheet and the statement of cash flows.

What is the cash flow statement. The cash flow statement reflects a firm s liquidity. A cash flow statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.