Wize University Introduction to Financial Accounting Textbook > The Cash Flow Statement
The Purpose of a Cash Flow Statement
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The Cash Flow Statement
The cash flow statement is the last of the major financial statements and its purpose is to detail the inflows and outflows of cash during the reporting period.
About the Statement
- Three categories: Operating, Investing, and Financing Activities
- Only concerned with cash flows
- Used to explain the change in Cash, Cash equivalents and short-term investments
Operating Activities
- Activities affecting cash related to the company's day-to-day operations.
- Transactions affecting current assets and current liabilities (except dividends payable)
Investing Activities
- Non-operating activities related to the purchase and sale of long-term assets
Financing Activities
- Non-operating activities related to long-term liabilities and equity