The format for a cash flow statement typically includes the following sections:
- Cash flows from operating activities: This section reports the cash inflows and outflows that arise from a company’s normal business operations. Examples of items that might be included in this section are cash received from customers, cash paid to suppliers, and cash paid to employees.
- Cash flows from investing activities: This section reports the cash inflows and outflows that arise from a company’s investments in assets such as property, plant, equipment, and securities. Examples of items that might be included in this section are cash received from the sale of investments, cash used to purchase equipment, and cash used to acquire another business.
- Cash flows from financing activities: This section reports the cash inflows and outflows that arise from a company’s financing activities. Examples of items that might be included in this section are cash received from the issuance of stock or bonds, cash used to pay dividends to shareholders, and cash used to pay off debt.
- The net change in cash and cash equivalents: This section reports the net change in cash and cash equivalents for the period, which is the sum of the cash flows from operating, investing, and financing activities.
- Cash and cash equivalents at the beginning of the period: This section reports the cash and cash equivalents on hand at the beginning of the period.
- Cash and cash equivalents at the end of the period: This section reports the cash and cash equivalents on hand at the end of the period.
The cash flow statement is typically presented in a vertical format, with the sections listed in the order described above. Additionally, some companies may provide additional information in the footnotes of the financial statements to explain the nature of the cash flows reported in each section.