Statement of Cash Flows

Statement of Cash Flows

Statement of Cash Flows

The statement of cash flows provides information on the cash receipts and payments for a specific period of time. The statement of cash flows reports (1) the cash effects of a company’s operations during a period, (2) its investing transactions, (3) its financing transactions, (4) the net increase or decrease in cash during the period, and (5) the cash amount at the end of the period.

Reporting the sources, uses, and change in cash is useful because investors, creditors, and others want to know what is happening to a company’s most liquid resource. The statement of cash flows provides answers to the following simple but important questions.

1. Where did cash come from during the period?

2. What was cash used for during the period?

3. What was the change in the cash balance during the period?

Owner’s Equity Statement

For the Month Ended September 30, 2012.

As shown in Softbyte’s statement of cash flows, cash increased $8,050 during the period. Net cash flow provided from operating activities increased cash $1,350. Cash flow from investing transactions decreased cash $7,000. And cash flow from financing transactions increased cash $13,700. At this time, you need not be concerned with how these amounts are determined.