Cash Flow Statement: options and information

The Cash Flow Statement report shows the cash inflows and outflows of the business over a period of time. You can use this report to analyze your business on a cash basis in addition to the accrual basis that most businesses use for profit reporting.

Although a Profit and Loss report that is based on accrual accounting is considered to show a more accurate picture of revenue and expense matching, there are certain items that may not affect the statement until future periods but can affect your cash reserves in the present. Revenues and costs and the resulting profits do not necessarily coincide with the associated cash outflows and inflows. Credit may be extended to customers, inventory must be replenished, your collection methods may be lagging, or new equipment may have to be purchased.

In addition to Profit and Loss reports and Balance Sheet reports, Cash Flow Statements are the most common form of report information that is required by outside lenders, such as banks and new vendors. More companies fail because of cash problems than because of profitability problems, so creditors are particularly interested in cash management success that results in a positive cash flow.

Open the report

  • On the Reports menu, point to Company and Financial, and then click Cash Flow Statement.

For detailed information about how to view individual transaction details, or modify, display, save, print, or export the report data, see Working with reports.

Report content

The Cash Flow Statement report shows the results of three different activities of the business.

Option Description
Operating activities Operating activities include cash that is generated or spent in normal daily operations. Operating activities are directly related to the sale and distribution of products or services. Items in this group include cash paid to suppliers and employees, collections from customers, cash paid for operating expenses, interest, and taxes. Operating activities also include changes in other current assets and liabilities. Non-cash expenses, such as depreciation, are added back to convert net income on an accrual basis to net income based on cash received and paid.
Investing activities Investing activities include longer-term sources and uses of cash, such as the investments made in fixed assets. Generally, investing activities are outflows. Investments in capital equipment facilitate business growth.
Financing activities Financing activities are external sources and uses of cash funds. They usually relate to how the business raises capital to fund investments and operations. Financing activities can include loans, contributions from owners, dividend payments, stock sales, or interest.
Applies to:
Accounting 2009