Problem:
A cash flow statement shows how cash moves in and out of a company during a specific period and has three sections: operating activities, investing activities, and financing activities. The operating section shows the company's cash generated or spent on core business operations, while the investing section shows cash generated or spent on fixed assets. The financing section shows how money was generated or spent on long-term liabilities, debt, and equity. A negative cash flow from operating activities is not a good sign. The net increase or decrease in cash is also significant in understanding a company's financial position. The cash balances for all three sections are summed up to calculate the net increase or decrease in cash for the fiscal year, which can be used to compare the company's financial health from period to period.
Chron. (2020, August 31). What is included in a cash & cash-equivalent calculation statement? Small Business - Chron.com. Retrieved February 13, 2023