“ PREPARATION AND

INTERPRETATION OF
STATEMENT OF
CASH FLOW
(INDIRECT METHOD)
“
 HOW TO PREPARE A CASH FLOW
STATEMENT USING THE INDIRECT
METHOD:
• Obtain the relevant documentation
Gathering your company’s financial information is the
critical first step.
• List the net income from the financial statements
Pull your company’s net income from its income statement,
and list it on the first line of the cash flow statement.
• List cash and noncash operating activities
List your company’s cash and non-cash expenses and
income, line by line.
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• List investing activities
List out, line by line, the cash generated or lost through
purchasing or selling stocks, securities, or loans.
• List financing activities
List out, line by line, the cash your company generated or lost
through funding mechanisms such as equity, dividends, and debt.
• Tabulate the total
Add cash and non-cash operating, investing, and financing
activities.
• List the final cash balance
The result of this subtraction or addition is your net cash flow.
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 325,00
0825,000
(3,000,000)
3,050,000
1,000,000
2,200,000

(300,000
)
(300,00
0)

1,1000,000
Net Cash from Financing 1,1000,00
0
3,000,000

7,000,000

10,000,00
0

4 Presentation title 20XX