Corporate life cycle: The four phases in the life of a business: introductory, growth, maturity, and decline. In each phase, the nature of the company’s cash flows changes.

direct method: A method of determining net cash provided (used) by operating activities on the statement of cash flows by adjusting each item in the statement of income from the accrual basis to the cash basis

free cash flow: A cash-based measure used to evaluate solvency. It is calculated by deducting net capital expenditures and cash dividends from net cash provided (used) by operating activities.

Indirect method: A method of determining net cash provided (used) by operating activities on the statement of cash flows in which net income is adjusted for items that do not affect cash.