STATEMENT OF

CASH FLOWS

GUISELDA B. VICENTE,LPT
 What is a SCF/CFS?
 summarizes the cash receipts and cash disbursements for the
accounting period.
 It classifies the cash activities (inflows and outflows) of the
business into operating, investing, and financing activities.
 It shows the net increase or decrease of cash in a given period
and the cash balance at the end of the period.
 This allows management to assess the ability of the business to
generate cash and project future cash flows.
 OPERATING
ACTIVITIES
 OPERATING ACTIVITIES

● Represent the cash receipts and cash

payments arising from the normal
operations of the business.

● Activities related to net income

 EXAMPLES

o Cash received from

customers
o Cash paid to suppliers
o Cash paid to employees
o Cash paid for selling and
administrative expenses
 INVESTING
ACTIVITIES
 INVESTING ACTIVITIES

● This refers to the acquisition and

disposal of long-term assets and other
investments that are not considered to
be cash equivalents.

● Activities related to non-current assets

 EXAMPLES

 Cash payment to acquire property, equity

or debt instruments of other entities
 Cash received for selling property, equity or
debt instruments of other entities
 Collection of principal loans made to other
entities
 FINANCING
ACTIVITIES
 FINANCING ACTIVITIES
● These pertain to activities that alter the
equity capital and borrowing structure of the
entity.
● Refers to the cash receipts and cash
payments from the owners and creditors of
the business.
● Activities related to non-current liabilities and
owner’s equity.
 EXAMPLES

 Cash received through

short-term or long-term borrowings

Cash payments for


short-term or long-term borrowings
PRACTICE
 PRACTICE
1. Employees’ salaries
2. Cash withdrawal by owner
3. Collection of rent
4. Purchase of furniture
5. Payment to suppliers
6. Interest expense
7. Payment of bank loan
8. Additional investment in the business
9. Rent Income
Thanks!
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