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Statement of cash flows - Coggle Diagram

- - - - based on income amount
    - - based on cash flows
- - - - helps evaluate the company's liquidity or solvency by summarizing changes in the financial position
    - - operating activities
        
        principal revenue-producing activities and others that are not investing/financing acts.
        
        providing services, manufacturing and merchandizing.
        
        starting point: net income amount
      - investing activities
        
        acquisition and disposal of long-term assets and other investments not included in cash equivalents
      - financing activities
        
        result in changes in the size and composition of the contributed equity and borrowings of the entity
    - - direct (inflows and outflows) method
        
        adjust sales and cost of sales, as well as other items in BS
      - indirect method
        
        two balance sheets (beginning-end of period)
        
        a statement of comprehensive income
        
        additional info. regarding entity's operations & events during period
    - - Determining cash increase / decrease
      - Determining increases / decreases of accounts in BS
      - Analyzing each increase / decrease in BS accounts
      - Classifying increases / decreases in the Cash Flow
      - Using info to prepare the Statement of Cash Flows