Business Terms Dictionary

Cash Flow Statement

És un key financial reports a understand financial reality de companyia, que és, com a money flows within business. It directly shows cash inflows i outflows (i.e., receipts and payments), a través de la teva experiència i la nostra companyia és generació de diners, pensió el wisely, i managing it efficiently. És crucial per a understanding liquiditat real i determinant que les empreses s'han obligat, investeixen, financen itself, o distribueixen dividends.

Components of the Cash Flow Statement


It is divided into three parts:

  1. Operating activities: revenues and expenses from the daily operations of the company, such as sales, salaries, and suppliers.
  2. Investing activities: purchase or sale of assets such as machinery or real estate.
  3. Financing activities: loans, debt payments, dividends, capital increases, or stock issuance.


Legal requirement for the Cash Flow Statement


Its presentation is mandatory as part of the annual financial statements, following the structure required by the Spanish General Chart of Accounts, except for small companies that submit abbreviated accounts, for which its presentation is optional.



How is it calculated?


It can be done directly, by recording actual receipts and payments, or indirectly, by starting with the accounting result and adjusting it as needed. 

To prepare it, we first need to gather the financial information (including the balance sheet and income statement), then calculate the cash flow for each activity, and finally, sum everything up to determine the net change in cash for that period.



Benefits of Forge Flow



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Forge Flow does it automatically with all the information it has, so you don’t have to worry about anything. And you can also consult the breakdown of all the calculations at any time.