Cash Flow Statement

A Cash Flow Statement is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents and breaks the analysis down to operating, investing and financing activities.

• AKA: Statement of Cash Flows.
• Context:
  • It can range from being a Governmental Cash Flow Statement to being a For-Profit Cash Flow Statement.
  • It can range from being an Operational Cash Flow Statement, ...
• Example(s):
  • a City of Sausalito Cash Flow Statement.
  • …
• Counter-Example(s):
  • a Balance Sheet, such as a governmental balance sheet.
• See: Shareholder, Financial Accounting, Cash and Cash Equivalents, Lender, Creditor, Investor.

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References

2016

• (Wikipedia, 2016) ⇒ http://wikipedia.org/wiki/cash_flow_statement Retrieved:2016-2-5.
  • In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business. The statement captures both the current operating results and the accompanying changes in the balance sheet. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals with cash flow statements.

    People and groups interested in cash flow statements include:

    • Accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses
    • Potential lenders or creditors, who want a clear picture of a company's ability to repay
    • Potential investors, who need to judge whether the company is financially sound
    • Potential employees or contractors, who need to know whether the company will be able to afford compensation
    • Shareholders of the business.

2014

• https://fmx.cpa.state.tx.us/fmx/pubs/afrrptreq/gen_acct/index.php?section=cash_flow&page=cash_flow
  • QUOTE: Present a statement of cash flows for all proprietary funds based on the provisions of GASB 9, as amended by GASB 34.
    Use the direct method of presenting cash flows from operating activities, including a reconciliation of operating cash flows to operating income. This reconciliation is presented as a separate schedule as part of the statement of cash flows.
    The statement of cash flows is submitted through the ACFR Web application. For more information, see Agency Cash Flow Reporting (ACFR) Web Application Instructions.
  • Purpose: The primary purpose of a statement of cash flows is to provide relevant information about an agency’s cash receipts and payments during the fiscal year. The statement of cash flows, when used with related disclosures and information in the other financial statements, provides relevant information about an agency, such as:
    • Its ability to generate future net cash flows.
    • Its ability to meet obligations when due
    • Its needs for external financing.
    • The reasons for differences between operating income and associated cash receipts and payments.
    • The effects on the agency’s financial position of its cash and its noncash investing, capital and financing transactions

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