Chapter 4
Reporting Cash Sources and Uses in the Statement of Cash Flows
IN THIS CHAPTER
Presenting the statement of cash flows in two flavors
Linking cash flow and net income
Reading the remaining sections the statement of cash flows
Digging into “free cash flow”
Offering advice and observations on cash flow
You could argue that the income statement (Chapter 2 of Book 3) and balance sheet (Chapter 3 of Book 3) are enough. These two financial statements answer the most important questions about the financial affairs of a business. The income statement discloses revenue and how much profit the business squeezed from its revenue, and the balance sheet discloses the amounts of assets being used to make sales and profit, as well as its capital sources. What more do you need to know? Well, it’s also helpful to know about the cash flows of the business.
This chapter explains the third primary financial statement reported by businesses: the statement of cash flows. This financial statement ...
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