Question
What is included on a cash flow statement?
Answers
GPT-4o mini
A cash flow statement is a financial document that provides a summary of a company's cash inflows and outflows over a specific period of time. It is divided into three main sections:
1. **Operating Activities**: This section shows cash flows from the core business operations. It includes:
- Cash receipts from customers (sales revenue)
- Cash payments to suppliers and employees (operating expenses)
- Cash flow from other operational activities, such as interest received and paid and tax payments.
- Adjustments for non-cash items (e.g., depreciation and changes in working capital).
2. **Investing Activities**: This section reflects cash flows related to the acquisition and disposal of long-term assets and investments. It includes:
- Cash payments for purchasing property, plant, and equipment (capital expenditures).
- Cash receipts from the sale of long-term assets.
- Cash flows from investments in securities or other companies, including gains or losses from those transactions.
3. **Financing Activities**: This section outlines cash flows related to funding the business. It includes:
- Cash received from issuing shares or taking loans.
- Cash payments for repaying debt, buybacks of stock, and paying dividends to shareholders.
Finally, the cash flow statement typically concludes with a reconciliation of cash and cash equivalents at the beginning and end of the period, showing how the cash balance has changed over that time.
1. **Operating Activities**: This section shows cash flows from the core business operations. It includes:
- Cash receipts from customers (sales revenue)
- Cash payments to suppliers and employees (operating expenses)
- Cash flow from other operational activities, such as interest received and paid and tax payments.
- Adjustments for non-cash items (e.g., depreciation and changes in working capital).
2. **Investing Activities**: This section reflects cash flows related to the acquisition and disposal of long-term assets and investments. It includes:
- Cash payments for purchasing property, plant, and equipment (capital expenditures).
- Cash receipts from the sale of long-term assets.
- Cash flows from investments in securities or other companies, including gains or losses from those transactions.
3. **Financing Activities**: This section outlines cash flows related to funding the business. It includes:
- Cash received from issuing shares or taking loans.
- Cash payments for repaying debt, buybacks of stock, and paying dividends to shareholders.
Finally, the cash flow statement typically concludes with a reconciliation of cash and cash equivalents at the beginning and end of the period, showing how the cash balance has changed over that time.