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Cash flow statement

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Vishal Kapoor

The document discusses a cash flow statement, which reflects sources and uses of cash from operating, investing, and financing activities. Operating activities relate to day-to-day business operations and include cash from sales, collections from debtors, and expenses. Investing activities involve the purchase and sale of long-term assets and investments. Financing activities relate to changes in a company's debt and equity capital structure, such as issuing shares or taking out loans. A cash flow statement provides useful information but has some limitations as precisely defining "cash" can be difficult.

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Cash flow statement BY- NEHA KUNDALIA SIBM HYD
What is CASH? Cash in hand Demand deposits in bank Cash equivalents short-term highly liquid investment readily convertible into cash
CASH FLOW STATEMENT It reflects applications & sources of cash resources resulting in increase/ decrease in cash & cash equivalents.
Cash flow statement
Cash flow statement
Operating activities Deals with day to day *Inflows Cash from sales Cash received from debtors Cash received from commission and fees Royalty & other revenues business activities. *Outflows Cash purchases Payment to creditors Payment of wages Income tax Cash operating expenses
Investing activities Acquisition and disposal of long-term * Inflows Sale of fixed asset Sale of investments Interest received Dividend received assets and other investments. * Outflows Purchase of fixed assets Purchase of investments
Financing activities Relate to changes in the composition of * Inflows Issue of :shares debentures Proceeds from borrowing: long term short term capital and debt of the company. * Outflows Cash repayments for the amount borrowed Interest paid on loan/debentures Dividends paid on: equity & preference shares
Limitations of cash flow It is very difficult to define the term cash. Controversies over a number of items like cheques,stamps,postal orders,etc to be included in cash or not. Prepaid and accruals recorded as increase in working capital would actually mislead to equate net income to cash flows.
Cash flow statement

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Cash flow statement

  • 2. What is CASH? Cash in hand Demand deposits in bank Cash equivalents short-term highly liquid investment readily convertible into cash
  • 3. CASH FLOW STATEMENT It reflects applications & sources of cash resources resulting in increase/ decrease in cash & cash equivalents.
  • 6. Operating activities Deals with day to day *Inflows Cash from sales Cash received from debtors Cash received from commission and fees Royalty & other revenues business activities. *Outflows Cash purchases Payment to creditors Payment of wages Income tax Cash operating expenses
  • 7. Investing activities Acquisition and disposal of long-term * Inflows Sale of fixed asset Sale of investments Interest received Dividend received assets and other investments. * Outflows Purchase of fixed assets Purchase of investments
  • 8. Financing activities Relate to changes in the composition of * Inflows Issue of :shares debentures Proceeds from borrowing: long term short term capital and debt of the company. * Outflows Cash repayments for the amount borrowed Interest paid on loan/debentures Dividends paid on: equity & preference shares
  • 9. Limitations of cash flow It is very difficult to define the term cash. Controversies over a number of items like cheques,stamps,postal orders,etc to be included in cash or not. Prepaid and accruals recorded as increase in working capital would actually mislead to equate net income to cash flows.