Cash Flow Statements
The statement of cash flow will show how cash and cash equivalents are coming in and going out of the company.
There are three components of the cash flow statement.
Cash flow from operating activities
Investing activities
And financing activities
Operating activities are what the business is generally doing. Cash from sales, that is your net income will be here, buying and selling inventory that will go for production. Paying factory rent and employee salaries will also fall under this category.
Investing activities are about what the company has nvested and is investing for its future. it can include the purchase or sales of long term assets like plants and equipment and property.
Financing activities are there to show how the company is financed and who the company is financing.
If the business has to raise capital somehow, it will be listed here. If the owners decide to take some money out of the business for themselves, it will be listed in this section.
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