CASH FLOW

STATEMENT

MARCH 20, 2023

REPORT BOOKLET
Prepared by: SAMANTHA L. JIMENEZ

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CASH FLOW STATEMENT
CFS

WHAT I NEED TO KNOW

This lesson contains the lessons of the structures and components of CFS.

After going through this lesson, you are expected to:

1. Discuss the components and structure of CASH FLOW STATEMENT(CFS).
2. Prepare a CFS

COMPONENTS AND
STRUCTURE OF CASH
FLOW
STATEMENT

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CASH FLOW STATEMENT

is a statement that presents the inflow and outflow of cash for the
year. It is dated" for the year ended" because it reconciles the
beginning balance of cash to its year-end balance. Its primary
purpose is to provide important and timely information about cash
receipts (inflow) and cash payments (outflow) of an entity during a
period. CFS is also useful in knowing about the entity's capacity to
pay dividends and meet its obligations.

This are classified into three main parts namely:

OPERATING ACTIVITIES

INVESTIGATING ACTIVITIES

FINANCING ACTIVITIES

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OPERATING ACTIVITIES
are directly related to the main revenue-producing activities of the
company or business. It includes cash effects of transactions that create
revenues and expenses. These activities enter into the determination of net
income.
Cash Inflows
• Receipts from sale of goods and performance of services.
• Receipts from royalties, fees, commissions, and other revenues
Cash Outflows
• Payment to suppliers of goods and services
• Payments to employees
• Payments to taxes
• Payments of interest expense
• Payments for other operating expenses

Figure 1. example of operating activities.

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INVESTIGATING ACTIVITIES
are cash flows related to purchase or sale of non-current asset and other
long-term investments.
NON-CURRENT ASSETS NOTES RECEIVABLE ACCOUNT DEBT SECURITIES
CASH INFLOW
• Receipts from sale of property and equipment
• Receipts from sale of investments in debt or equity securities
• Receipts from collections on notes receivable
CASH OUTFLOW
• Payment to acquire property and equipment
• Payment to acquire debts or equity securities
• Payments to make loans to others generally in the form of notes
receivable
Figure 2. example of investing activities

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FINANCING ACTIVITIES
• are cash transactions that are related to nontrade liabilities (borrowings)
and changes in equity.
The following are examples of cash flow transaction that are classified
under financing activities:
OWNER'S EQUITY WITHDRAWALS NOTES PAYABLE ACCOUNT
CASH INFLOW
• Receipts from investments by owners
• Receipts from issuance of notes payable
CASH OUTFLOW
• Withdrawals of the owner
Payments to settle notes payable

Figure 3. examples of CFS

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 Figure 4. examples of CFS

The structure of CFS presents the results of the three

activities discussed previously. Operating activities section
always appears first, followed by the investing activities and
lastly, financing activities. The sum of the three sections
equals the net increase or decrease in cash for the period.
This amount is added to the beginning cash balance to arrive
at the ending cash balance.

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PRESENTED BY:

SAMANTHA L. JIMENEZ

SIERRA MAY I. MILLOROSO

HARVEY BRYL N. CLOMA

ACE CARL A. CONCEPCION