Easy Come, Easy Go: Statement of Cash Flows
In This Chapter
Identifying what makes up the statement of cash flows
Putting the statement of cash flows to good use
Cash is very useful. In fact, most everyone likes having some cash available to them. Sometimes people like to use cash to purchase things that are of value, such as homes, investments, and so on. Sometimes people like to take those things that are of value and turn them into cash to be used for other things, such as an individual who sells his time and efforts (both of which have value) to an employer for cash so that he can then turn that cash into a mortgage payment (or a night of binge-drinking and gambling).
In this chapter, I discuss the statement of cash flows, the financial record that tells all about the movement of cash into a company (inflows) and out of a company (outflows), and the reasons why these cash flows occur.
Piecing Together a Puzzle of Cash Flows
Cash and cash equivalents hold a special place in the hearts of managers, investors, and lenders. Even the love stories of old are rarely able to portray the dedication and devotion that some people have for cash. No wonder companies write their own love poems about cash (and the way they use it) in the form of financial statements called statements ...