The finance story teller explains the cash flow statement

What is the cash flow from operating activities, financing activities and investing activities?

The cash flow statement is one of the three main financial statement.

Balance sheet

Assets Liabilities

What we own What we ow

Income statement

Revenue

+/-Expenses=profit

Sales-Costs=Income

Cash flow statement

Cash @1/1

+Cash in –Cash out=Cash @12/31

As the cash flow statement is measures how much cash come in and out during the year.sources and
uses of cash statement as of how the cash balance (one of the most important assets) has developed
between two balance sheets.A useful methaphor is by looking a bathtub at a point in time cash flow is
how much cash in from tap minus what flow down during the period.So if you check the tub between 9
pm and 9”05 pm then those are two balances.If the water has risen during those 5 minutes you have a
net cash inflow and if the water drops you have net cash outflow.Cash balance…Cash flow keep the
bathub methapor when dealing with cash flow and cash balance.

Cash is king

It is critical at every companies life cycle.When you open your own business you need cash to get
started.You will beed cash to grow and expand.If a company runs out of cash to pay its bills its game
over.What you see in a cash flow statement is a companies strategy.Is the company sustainable enough
to pay its sustainable advantage.Are the customers willing to pay the companies products that the
company supplies?Is the company able to reward its investors for the risk they have taken by paying
dividend.This are the answers taken when analyzing the cash flow statement.

Cash flow statement example

Fourth quarter 2016 results

Re-shaping Shell, to create a world-class investment case

Royal Dutch Shell plc

February 2,2017
Not the contents of this video is an investment advice.All numbers and graphs come from direct release
by that company

Shells cash balance at the year end 2012 is 18.6 dollar @ year end 2013 9.7B

The cash flow during 2013 therefore was a negative 8.9B @Year end 2014

21.6B was a positive 11.9B

the cash balance increased.at the end of 2015 the cash balance is 31.8b dollars.Cash flow os +$10.2B
@Year end 2016$19.1B

due to a net cash outflow during the year -$12.7B

Total net cash balance and the total net cash flow but it doesn’t tell us what inside the company.We
have to dig a deeper level into cash flow That’s why cash flow statement is split into 3 sections

Cash flow-Operating,Investing, Financing

Cash from operating activities (CFOA)

Cash flow from operations(CFFO)

Cash from operating activites

Cash in minus the purchases from suppliers. minus the salaries, and governments.From most good
health from operations net cash inflow.

Cash from Investing activities(CFIA)

Cash flow from investing (CFFI)

Cash flow from investing activities

Capital expenditures, acquisitions and divestments(inflow)