InvestorQ : What are the components of the cash flow statement of companies?
Riya Dwivedi made post

What are the components of the cash flow statement of companies?

Answer
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rhea Babu answered.
1 year ago


Broadly, there are 3 components to a cash flow statement. The first component is the “Cash flow from operations”. Here the starting point is the net profits and it removes any non-operating items and also removes non-cash items like depreciation and amortization. The result is the cash flow generated from operating activities. The second component is the “Cash flow from investing”. Here the purchase of capital assets is considered as outflows and the sale of capital assets are considered as inflows. The third component is the “Cash flow from Financing”. Here the flow of equity and long term debt are considered. This includes fresh equity issues, buyback of shares, dividends paid, long term borrowings, loans repaid etc. The combination of these 3 activities gives you the overall cash flows and it precisely explains the difference in the cash balance between the two years.