Slide 6.1
Chapter 6
Measuring and Reporting Cash Flows
By Dr Ishani Chandrasekara
,Slide 6.2
LEARNING OUTCOMES
You should be able to:
Discuss the crucial importance of
cash to a business
Explain the nature of the statement of cash
flows and discuss how it can be helpful in
identifying cash flow problems
Prepare a statement of cash flows
Interpret a statement of cash flows
, Slide 6.3
Statement of Cash Flows
• The comparative balance sheet reports financial position
– Shows whether cash increased or decreased
– Does not show why cash changed
– Covers a specific moment in time
• The statement of cash flows reports cash
– where cash came from (receipts) and how cash was spent
(payments)
– Reports why cash increased or decreased during the period
– Covers a span of time and is dated the same as the income
statement
– The communicating link between income statement and
balance sheet
Chapter 6
Measuring and Reporting Cash Flows
By Dr Ishani Chandrasekara
,Slide 6.2
LEARNING OUTCOMES
You should be able to:
Discuss the crucial importance of
cash to a business
Explain the nature of the statement of cash
flows and discuss how it can be helpful in
identifying cash flow problems
Prepare a statement of cash flows
Interpret a statement of cash flows
, Slide 6.3
Statement of Cash Flows
• The comparative balance sheet reports financial position
– Shows whether cash increased or decreased
– Does not show why cash changed
– Covers a specific moment in time
• The statement of cash flows reports cash
– where cash came from (receipts) and how cash was spent
(payments)
– Reports why cash increased or decreased during the period
– Covers a span of time and is dated the same as the income
statement
– The communicating link between income statement and
balance sheet
