How To Prepare A Statement Of Cash Flow?

Posted by Ana Orwel on Thursday, January 29, 2009

It is easy to learn and understand how to prepare a statement of cash flow if you know the main steps of this process and have sufficient data.

The easiest and most convienient way to prepare a statement of cash flow is applying indirect method. Applying this method cash flow statement is prepared using income statement and balance sheet for the period of cash flow statement.

Cash flow statement has three main parts:

1. Cash flow from (used in) operating activities
2. Cash flow from (used in) investing activities
3. Cash flow from (used in) financing activities.

You have to take certain data from the income statement and balance sheet to prepare these three main parts. You can learn in more detail how to prepare a statement of cash flow with our free accounting courses.