Statement of cash flows - shows net decrease and increase in cash during the period and the cash balance at the

end of the period; helps project the future net cash flows of the entity.

Operating activities - involves providing services, producing and delivering goods.

; determination of profit or loss.

Direct Method - adding the individual operating cash inflows and then subtracting the individual operating cash

outflows.

Profit

Adjustments for:

non-cash expenses

(increases in current asset)

(decreases in current liabilities)

decreases in currrnt asset

increases in current liabilities

Cash Flows from operating activities

Inflows:

Sale of goods and performance services

Royalties, fees, commissions, other revenues

Outflows:

To suppliers of goods and services

To employees

For taxes

For interest expenses

Investing activities - include making and collecting loans; acquiring and disposing investments in debt or equity

securities; obtaining and selling of PPE.

Inflows:

Sale of property and equipment

Sale of investments in debt ir equity security

Collections on notes receivable

Outflows:

Acquire property and equioment

Acquire debt or equity securities

Male loans to others in form of notes receivable

Financing activities - obtaining resources from owners and creditors

Inflows:

investment by owners

Issuance of notes payqble

Outflows:

To owners in the form of withdrawals

To settle notes payable