Cash Flow Statements: Lecture Notes – XACC 291

Summary

Cash flow statements are a key part of a company's annual report. They show how much cash a company has generated and spent, and help investors and lenders decide where to put their money.

Cash Flow Basics

Cash flow statements are vital for understanding a company's financial health. They show how much cash a company has generated and spent, and help investors and lenders decide where to put their money.

Operating Activities

Cash flow from operating activities shows how much cash a company has generated through its core business operations. It does not include investing or financing activities.

Investing Activities

Cash flow from investing activities shows how much money a company has spent on investments. This includes capital expenditures and monetary investments.

Financing Activities

Cash flow from financing activities shows how a company raises and pays back money. This includes issuing debt, paying dividends, and repurchasing shares.

Key terms

Cash Flow Statement

A financial statement that shows how much cash a company has generated and spent.

Operating Activities

The day-to-day activities of a company that generate cash.

Investing Activities

The activities a company undertakes to invest in its future growth.

Financing Activities

The activities a company undertakes to raise and repay money.

Capital Expenditures

Money spent by a company on long-term assets like equipment.

Monetary Investments

Money invested by a company in financial markets.

Questions this document helps with

• What do cash flow statements show about a company?
• How do companies generate cash through operations?
• What types of activities do companies undertake to invest in their future?

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