Understanding the Statement of Cash Flows

A collection of vocabulary flashcards based on the key concepts presented in the lecture about the statement of cash flows.

Statement of cash flows

Measures increase or decrease in cash, linking accrual-based income statement to balance sheet.

Operating activities

Cash in and out resulting from operations, such as selling meals and paying employees.

Investing activities

Cash flows resulting from buying and selling property, plant, and equipment.

Financing activities

Cash flows related to raising or distributing funds to owners, such as selling stock or repaying loans.

Cash inflow

Money received by the company, including cash from customers, interest income, and dividend income.

Cash outflow

Money paid out by the company, including payments to suppliers, employees, and for operating expenses.

Future cash flows

The ability of a company to generate cash flows in the future.

External financing

Funds that a company must raise from outside sources, like loans or investors.

Net income vs cash receipts

Examines the differences between net income reported and actual cash received or paid.

Cash impacts of transactions

The effects of a company's investing and financing activities on cash flow.