ABSTRACT
This chapter explains the cash flow statement with simple examples. The cash flow statement is probably the most confusing of the three statements and it is best described as a highlighting mechanism for movements in the items that affect the bank balance. The reality is that the cash flow statement evolved from what was previously called sources. Rather than the sources and uses of funds being listed in total, they are listed under specific headings created by their differing cash flow management requirements, as follows: Cash Flows from Operating Activities, Cash Flows from Investing Activities, Cash Flows from Financing Activities, Net Movement in Cash, Cash at Beginning, and Cash at the End. Cash Flows from Investing Activities is further divided into Non-current Asset Movements, Interest and Dividends Received and Cash Flows From Operating Activities is also categorized as Operating profit, depreciation, working capital movement, Interest Paid, Tax Paid.
