Cash flow statement demonstrates the flow of cash coming into a business and going out from a business through operating activities, investing activities and financing activities. Unlike income statement it doesn’t record any transaction that doesn’t involve cash like sale on credit.

What Is Cash Flow Statement?

Operating activities record cash transactions related to the daily operation like cash payment to suppliers, employees and cash receipt from customers.

Operating Activities

Investing activities record purchasing and selling of long term assets and other investments including purchase of property, plant, equipment, invest in intangible assets, acquisition of another company, investment in equity and debt securities etc.

Investing Activities

Financing activities include obtaining or repaying capital from or to shareholders and creditors. A company can obtain capital from issuing common stock, right shares or debt instruments like bonds. These items are recorded in this segment. Cash outflows include cash payments to repurchase stock (e.g., treasury stock) and to repay bonds and other borrowings.

Investing Activities

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