Statement of Cash Flows

This report shows how your cash position changed over a period. It shows the amount of cash earned from profit, where you received additional cash, and where you spend you cash. In other words, the statement of cash flows shows how cash moves in and out of a business.

There are three components of cash flow on the statement of cash flows:

Cash flow from operating activities gets the most attention. You calculate this by starting with net income and excluding non-cash adjustments. For example, you add depreciation expenses (because depreciation is an accounting charge that does not really result in any cash leaving the business). You also add accounts payable and subtract accounts receivable (because the cash has not yet changed hands, although it will change hands in the future). Any other non-cash adjustments to net income need to be removed, and then you will arrive at cash flow from operations.

Cash flow from investing activities reports acquisition and sales of fixed assets. The company may have bought a building somewhere and sold a building elsewhere. The cash flows from those activities are reported here. Cash flow from investing activities is simply proceeds from sales minus cost of acquisitions.

Cash flow from financing activities reports anything the business did regarding finances. It includes paying off debt (bonds and notes) as well as acquiring new debt. Cash flow from financing activities also includes any stock purchases or sales, and dividend payments to shareholders.

Initially, the report shows your cash flow for the fiscal year to date, but you can change the reporting period by choosing a different date range from the Dates list.

To see a list of the transactions that make up an amount, double-click the item in the list.

To view this report:

  1.  On the Reports menu, point to Company & Financial and then click Statement of Cash Flows