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Cash Flow Statement

Cash Flow Statement

A financial statement that presents information about cash inflows and outflows associated with a company's operations, investing, and financing activities during a specific period.

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IAS 7

An International Accounting Standard that outlines the requirements for preparing cash flow statements.

Operating Activities

Revenue-generating activities of a company that result in cash inflows and outflows.

Investing Activities

Cash flows related to the acquisition and disposal of long-term tangible and intangible assets and other investments.

Financing Activities

Cash flows that relate to changes in the size and composition of a company's contributed capital and financial debt.

Direct Method

A method for presenting operating cash flows that shows the major categories of gross cash inflows and outflows.

Indirect Method

A method for determining net operating cash flow by adjusting net profit for non-cash items and changes in working capital.

Cash Conversion Cycle

The time it takes for a company to convert its investments in inventory and other resources into cash flows from sales.

Liquidity

The ability of a company to meet its short-term financial obligations, determined by the nearness of its assets to cash.

Solvency

The ability of a company to meet its long-term financial obligations, determined by the timing and uncertainty of expected future cash flows.

Cash Flow Proxy

A calculation used to estimate cash flow based on net profit, adding back non-cash expenses and adjusting for changes in working capital.

Non-Cash Activities

Transactions that do not involve cash but affect the financial position of a company, such as depreciation or asset disposals.

Cash Flow Cycles

The continuous flow of cash through a company in both short-term (operating) and long-term (investing and financing) cycles.

Net Change in Cash

The difference between the beginning and ending cash balances over a specific period.

Presentational Differences

Variations in how cash flow information can be classified or presented in financial statements, such as interest paid or received.