KNOWLEDGE FOR ACTION

Statement of Cash Flows

Reports changes in cash due to operating, investing, and financing
activities over a period of time
Statement of Cash Flows format:
Net cash from operating activities +
Net cash from investing activities +
Net cash from financing activities =
Net change in cash balance
Non-cash transactions are disclosed at the bottom of the statement
Cash interest paid and cash income taxes paid must also be
disclosed
KNOWLEDGE FOR ACTION
Operating Activities
Transactions related to providing goods and services to customers
and to paying expenses related to generating revenue (i.e. income
statement activities)
Collections from customers
Operating
Activities
Payments to suppliers
Receipts of interest and
dividends on investments
Payments to employees
Payments of interest and tax
Other operating disbursements
Operating cash outflows exclude these income statement items:
Depreciation and amortization (and other noncash items)
Gains or losses on disposal of PP&E
Cash inflows Cash outflows
KNOWLEDGE FOR ACTION
Investing Activities
Transactions related to acquisition or disposal of long-term assets
Cash inflows Cash outflows
Investing
Activities
Divestitures of businesses
Sale of investments
Acquisition of businesses
Purchase of investments
Sale of PPE & intangibles Acquisition of PPE & intangibles
KNOWLEDGE FOR ACTION
Financing Activities
Transactions related to owners or creditors (except for interest
payments)
Financing
Activities
Issue of new stock
Borrow money
Payment of dividends
Payment of principal on debt
Reissue treasury stock Purchase of treasury stock
Cash inflows Cash outflows
KNOWLEDGE FOR ACTION
Statement of Cash Flows
Collections from customers
Operating
Activities
Payments to suppliers
Receipts of interest and
dividends on investments
Payments to employees
Payments of interest and tax
Other operating disbursements
Investing
Activities
Divestitures of businesses
Sale of investments
Acquisition of businesses
Purchase of investments
Sale of PPE & intangibles Acquisition of PPE & intangibles
Financing
Activities
Issue of new stock
Borrow money
Payment of dividends
Payment of principal on debt
Reissue treasury stock Purchase of treasury stock
KNOWLEDGE FOR ACTION
Statement of Cash Flows
Collections from customers
Operating
Activities
Payments to suppliers
Receipts of interest and
dividends on investments
Payments to employees
Payments of interest and tax
Other operating disbursements
Investing
Activities
Divestitures of businesses
Sale of investments
Acquisition of businesses
Purchase of investments
Sale of PPE & intangibles Acquisition of PPE & intangibles
Financing
Activities
Issue of new stock
Borrow money
Payment of dividends
Payment of principal on debt
Reissue treasury stock Purchase of treasury stock
Note: Under IFRS, interest and dividends received and paid may be
classified as operating, investing, or financing
KNOWLEDGE FOR ACTION
SCF and Growth Stages
StartUp Early Growth Mature Decline
OperatingCashFlow (3) 7 15 4
InvestingCashFlow (15) (12) (8) (1)
Financing CashFlow 18 5 (7) (3)
NetCashFlow 0 0 0 0