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CASH FLOW STATEMENT - Coggle Diagram
CASH FLOW STATEMENT
PREPARATION
FINANCIG ACTIVITIES
INFLOW
Issue of shares & debentures in cash, proceedings from borrowings
OUTFLOW
Repayment of borrowings, redemption of shares & debentures, payment of interest & dividend
INVESTING ACTIVITIES
INFLOW
Sale of fixed asset & investments, interest & dividend received
OUTFLOW
Purchase of fixed assets & investments, loans and advances to third party
OPERATING ACTIVITIES
INFLOW
Cash sales, cash received from debtors, Income tax refund
OUTFLOW
Cash purchases, payment to trade payables, income tax paid
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IMPORTANCE
Facilitates to ascertain net cash flow
Facilitates planning and management decisions
Helpful in assuming liquidity & solvency
MEANING
It is a statement that shows the inflow and outflow of cash & cash equivalents during a specified period.