The Statement of Cash Flows
By the end of this chapter, you should be able to:
• Describe the kinds of information disclosed by the statement of cash flows.
• List the three key areas of cash flows disclosed in a statement of cash flows.
• Identify and describe the two accepted statement of cash flows formats.
• Explain the free cash flow concept
A balance sheet (or statement of financial position, as it is often called) is a snapshot of the amounts of assets, liabilities, and owners’ equity at a specific moment in time. Balance sheets are prepared at least annually, often quarterly, and even perhaps ...