Course Outline
Join PRO

What is the statement of cash flows?

Author:
Harold Averkamp, CPA, MBA

Definition of Statement of Cash Flows

The statement of cash flows (SCF) is one of the required external financial statements. The SCF is commonly referred to as the cash flow statement.

The statement of cash flows presents the following information:

  • The major cash inflows and cash outflows during the period of the income statement
  • A reconciliation of the change in a company’s cash and cash equivalents from the beginning of the accounting period to the end of the accounting period
  • Supplementary information including the amount of income taxes paid, the amount of interest paid, and significant noncash investing and financing activities (such as issuing common stock in exchange for land)

The statement of cash flows is important because investors, lenders, financial analysts, and others are interested in an organization’s cash flows, which are not available from the income statement because of the accrual basis of accounting.

Example of Statement of Cash Flows

You can see an example of an SCF by searching the internet for any corporation whose stock is publicly traded. You will see that the SCF shows the corporation’s cash inflows without parentheses, and the cash outflows are shown in parentheses. The major cash flows are arranged in the financial statement as follows:

  • Operating activities
  • Investing activities
  • Financing activities
Join PRO to Track Progress

Features

Free

PRO

Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Dictionary
Bookkeeping Video Training
Financial Statements Video Training
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Flashcards
Crossword Puzzles
Word Scrambles with Coaching
Bookkeeping Study Guide
Managerial and Cost Accounting Study Guide
Certificates of Achievement
Bookkeeping Certificate of Excellence
Business Forms
Printable PDF Files
Progress Tracking
Motivational Badges and Points
Motivational Medal Rankings
Motivational Activity Streaks
Public Profile Page of Achievements

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Read 3,033 Testimonials

PRO for Teams
  • Convert your existing PRO account to a "Team" account for free
  • Easily add new PRO users and admins to your team
  • Monitor team progress, average grades, recent activity, achievements, and more
PRO for Teams
Take the Tour Join Pro Upgrade to Pro