Statement of Cash Flows and its Analysis (PAS 7)

Statement of Cash Flows

- A report that shows how the items that affect the balance sheet and income statement affect the
firm’s cash flows.

Company Name
STATEMENT OF CASH FLOWS
For the period ending mm/dd/yyyy

Operating activities
Cash receipts from sales of goods xx
Cash receipts from collection of interest on loans made to other xx
entities
Cash receipts from royalties, fees, commissions and other revenues xx
Cash receipts from lawsuit settlements xx
Cash payments for purchases of merchandise (xx)
Cash payments to employees (xx)
Cash payment for taxes (xx)
Cash payments to lenders for interest on loans (xx)
Cash payments for other operating expenses (xx)
Cash payments to settle lawsuits (xx)
Net cash provided by (used in) operating activities xx/(xx)

Investing activities
Cash receipts from sale of noncurrent assets xx
Cash receipts from sale of investments in debt or equity securities xx
Cash receipts from collection of principal for loans made to other xx
entities
Cash payments for purchase of noncurrent assets (xx)
Cash payments for the purchase of investments in debt or equity (xx)
securities
Cash payments for loans made to other entities (xx)
Net cash provided by (used in) investing activities xx/(xx)

Financing activities
Cash receipts from sale of common stock xx
Cash receipts from issuance of bonds xx
Cash dividends paid to shareholders (xx)
Cash payments to settle borrowings (xx)
Net cash provided by (used in) financing activities xx/(xx)

Net increase/(decrease) in cash xx/(xx)

Cash balance at the beginning of the period xx
Cash balance at the end of the period xx

Notes:
 Operating activities affect profit or loss
 Investing activities affect noncurrent and non-operating assets
 Financing activities affect noncurrent and non-operating liabilities and equity
 Interest received and paid should be shown under operating activities (option 1).
 Dividend received is an operating activity while dividend payment is a financing activity.
(option 1)
 Notes to Statement of Cash Flows is provided to list noncash items of investing and financing
activities.
Cash flow from operating activities may be presented using:
a. Direct method
b. Indirect method

INDIRECT METHOD (Income statement method)

Net income xx
Add: Depreciation xx
Non-operating losses xx
Decrease in current assets xx
Increase in current liabilities xx xx

Less: Non-operating gains xx

Increase in current assets xx
Decrease in current liabilities xx xx
Net cash provided (used) by operating expenses xx

DIRECT METHOD (Balance sheet method)

Revenue from Sales xx Operating expenses xx
Add: Decrease in accounts receivable xx Add: Increase in prepaid expenses xx
Less: Increase in accounts receivable xx Less: Decrease in prepaid expenses xx
Cash receipts from customers xx Add: Decrease in accrued expenses payable xx
Less: Increase in accrued expenses payable xx
Cash payment for operating expenses xx
Cost of goods sold xx
Add: Increase in inventory xx
Less: Decrease in inventory xx Income tax expense xx
Add: Decrease in accounts payable xx Add: Decrease in income taxes payable xx
Less: Increase in accounts payable xx Less: Increase in income taxes payable xx
Cash payments to suppliers xx Cash payment for income taxes xx

Summary:
Operating Activities
Cash receipts from customers xx
Cash payments to suppliers xx
Cash payment for operating expenses xx
Cash generated from operations xx
Interest (paid)/received (xx)/xx
Income taxes paid (xx)
Net cash provided (used) by operating activities xx