What you’ll learn to do: Discuss key financial principles needed to produce and analyze a statement of cash flows
The statement of cash flows goes through where are cash comes from in our company. We need to look a little deeper than just cash-in and cash-out to find out if we are managing our cash in the best way possible! We will go through two methods, the direct and indirect method. Most companies use the direct method, but it is good to be familiar with both.
Take a look at this video for an introduction to the statement of cash flows and analysis of cash:
This statement allows us to better see where our money is coming from, how quickly we are collecting cash and where our cash is being spent!