Statement of Cash Flows
Where cash came from and where it went: operating, investing, financing.
What is Statement of Cash Flows?
Reconciles net income to the actual change in cash. Operating activities cover the core business (non-cash charges like depreciation are added back). Investing covers buying and selling long-term assets. Financing covers borrowing, repaying debt, issuing stock, and paying dividends.
Statement of Cash Flows: a worked example
A company can report net income while cash falls, if it spent heavily on equipment (investing) and paid down debt (financing).
More terms in Economics & Financial Reporting
Business Cycle
The recurring pattern of expansion, peak, contraction, and trough.
Leading, Coincident & Lagging Indicators
Data series that move before, with, or after the business cycle.
Deflation vs. Disinflation
Falling prices versus a slowing rate of price increases.
Currency Valuation & Exchange Rates
What one currency buys of another, and who wins when it moves.
Sovereign Debt
Bonds issued by a national government.
Trade Deficit
A country imports more goods and services than it exports.
Income Statement
Revenue, expenses, and profit over a period of time.
Balance Sheet
Assets, liabilities, and equity at a single point in time.