Episode 95: Introduction to Financial Statements: The Statement of Cash Flows
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The statement of cash flows is a type of financial statement produced under financial accounting, and it's designed to show how a company spends and receives its cash. The statement of cash flows is divided into three areas: operating cash flow, investing cash flow, and financing cash flow.
Operating cash flow includes cash received or spent mainly due to the sale of goods and services. Investing cash flow consists of cash received or spent due to the sale of fixed assets and long-term securities. Financing cash flow includes cash generated due to the sale or purchase of company securities and long-term debt. Collectively these areas determine the total cash flow for a company in a given accounting period.
