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Statement of Cash Flows
A financial statement that measures cash flow from operating, investing, and financing activities.
Cash Equivalents
Short term, highly liquid investments, such as money market funds and treasury bills, that can be converted into known amounts of cash.
Operating Activities
Transactions that include the sale of goods and services, changes in current assets and liabilities, and other daily business operations.
Investing Activities
Transactions related to the purchase or sale of long-term assets like property and equipment.
Financing Activities
Transactions involving obtaining resources from shareholders and lenders, including the issuance of shares and repayment of loans.
Indirect Method
A method for preparing the statement of cash flows that adjusts net income for changes in balance sheet accounts to derive cash flow from operating activities.
Direct Method
A method for preparing the statement of cash flows that directly reports cash receipts and payments from operating activities.
Operating Cash Flow Ratio
A measure that indicates the percentage of current liabilities that can be met with one year's operating cash flows.
Net Free Cash Flow
The cash flow generated from operating activities available to common shareholders, after accounting for capital expenditures.
Cash-to-Cash Cycle
The time taken between cash outflow for goods and cash inflow from sales.
