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In financial accounting, a cash flow statement, also known as statement of cash flows, [1] is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. Essentially, the cash flow statement is concerned with ...
It contains activities from operations that alter the cash of a company has on hand. Changes in financial position include cash outflows, such as capital expenditures, and cash inflows, such as revenue. It may also include certain non-cash changes, such as depreciation.
Cash flow from investing activities - the amount of cash generated from investing activities such as purchasing physical assets, investments in securities, or the sale of securities or assets. Cash flow from financing activities - the net flows of cash that are used to fund the company.
In business, maintaining positive cash flow is vitally important. Cash flow refers to the movement of cash in and out of a business as it generates revenue while also covering its operating expenses.
Exposure to rollover risk at a given date is a sum of cash flows from deposits that will be matured at this date. Exposure to run risk at a given date is a sum of balances in non-maturity deposit accounts at this date. An early withdrawal risk affects a rollover risk through decrease of cash flows that will be repaid in the future.
In financial accounting, operating cash flow (OCF), cash flow provided by operations, cash flow from operating activities (CFO) or free cash flow from operations (FCFO), refers to the amount of cash a company generates from the revenues it brings in, excluding costs associated with long-term investment on capital items or investment in securities. [1]
Free cash flow measures the cash a company generates which is available to its debt and equity investors, after allowing for reinvestment in working capital and capital expenditure. High and rising free cash flow, therefore, tend to make a company more attractive to investors. The debt-to-equity ratio is an indicator of capital structure.
In discount cash flow analysis, all future cash flows are estimated and discounted by using cost of capital to give their present values (PVs). The sum of all future cash flows, both incoming and outgoing, is the net present value (NPV), which is taken as the value of the cash flows in question; [ 2 ] see aside.