What is Cash Flow Statement in Accounting Fundamentals

You learnt about the income statement. However, the income statement does not capture all the financial events carried out by a business. This raises the need for other financial statements.

In the upcoming video, our faculty, Marie-Lys will introduce you to the next fundamental financial statement: the cash flow statement.

In this video, you learnt the following:

• A cash flow statement indicates the amount of cash inflow and outflow of a company over a period of time.

• The cash inflows and outflows of a company are generated by its operating, investing, and financing activities.

The total cash flow generated 
= Cash at the end of the period - Cash at the beginning of the period
= Cash inflow - Cash outflow
 

$Netcashflow=CFO-CFI+CFF$

where,

CFO = Cash generated from operations

CFI = Cash spent in investments
CFF = Cash received from financing activities

In the next segment, you will learn about another type of financial statement: the balance sheet.