Statement of cash flow
The statement of cash flows shows the flow of cash within the business, including where it came from and how it was spent during a specific time period.
Cash flows is categorized into 3 types of activities
1 operating activities:- shown how much cash was generate from operating which make up the day-to-day running of the business.
2 investing Activities:-shown how much cash was generated from asset purchase for the business, such as equipment, regardless of whether the transaction was paid in cash or financed.
3 Financing Activities:-shows the cash that has come in or gone out of the company for the purpose of financing all of the other business activities.
Cash flow is esseintail to stay in business. if you don’t have enough cash to meet your obligation and to reinvest,then you won not be in business very long.+
the profit and loss statement and the balance sheet reports alone cannot tell you everything that you need to know to make a good business decisions
There are 3 section of cashflow statement
This figure will directly come from the bottom line of your profit and loss statement.net cash provided by operating activities this section is comprised of the net cash inflow and outflow of the day-to-day business operating for pause plumbing this includes any cash generated from the sale of plumbing produc6t and service net cash provided.
Net cash provided by investing activities
This section is comprised of the net cash inflow and outflow of any investments made in the business x purchase a truck to use in his business.so that purchase is listed here as the cash flow statement.
Net cash provided by financing activities
This section is comprised of the net cash inflow and outflow of any types of financing that supports the business operations in this example x purchase a truck so the amount of the loan that he took to purchase the truck in listed in this section as a cash inflow item net cash provided by financing activities is XXXX amount