Cash Flow Statement Definition

Forex Glossary


The cashflow statement is a fiscal accounting record which shows how cash flows into and out of a organization. Cashflow statements provide analysts and investors with insights in to the change in cash and cash equivalents in a specific accounting period.


Net Cash Flow = Cash Flow from Operations Cash Flow from Investing Cash Flow from Financing

Note: While the above mentioned analysis shows three additive elements, the money flow from financing and investing actions are logically negative worth.


Also referred to since the statement of cash flows and capital flow statement, an organizations cashflow statement joins information which appears on either balance sheet in addition to the revenue statement. There are 3 Chief classes appearing in this particular report:

  • Operations: begins using net gain afterward corrects for non-cash expenses like depreciation, amortization, and deferred taxes. Includes changes to balance sheet items such as stocks, accounts receivable, in addition to accounts receivable and other obligations.
  • Investing Activities: comprises the sale or purchase of resources, capital expenditures, dividends received, and also the internet vary to additional investments like marketable securities.
  • Financing Activities: consists of money received when issuing long-term debt, payment of dividends, repurchases or earnings of business inventory, and payment of the loans.

Companies with foreign surgeries can additionally report that the consequence money market rates have in their own cash position.

The cashflow statement helps creditors and investors to gain insights in to the liquidity position of a organization. Additionally, it offers up a better comprehension of the provider ‘s true operating performance, as it gets rid of the impacts of the provider ‘s preferred accounting technique.


The table below outlines the data emerging on Company A’s money flow announcement:

Net Income $4,283,000
Depreciation $1,236,000
Accounts Receivable -$196,000
Inventory -$196,000
Other Operating Activities $157,000
Total Cash from Operating Activities $5,284,000
Capital Expenditures -$1,379,000
Investments -$745,000
Other Investing Activities -$594,000
Total Cash from Investing Activities -$2,718,000
Dividends Paid -$1,555,000
Shares Repurchased -$1,799,000
Net Borrowings -$307,000
Other Cash from Financing Activities -$50,000
Total Cash Flow from Financial Activities -$3,711,000
Effect of Exchange Rate Changes -$50,000
Change in Cash and Cash Equivalents -$1,195,000

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