Cash flow statement is a statement which
shows the sources of cash inflow and uses of cash
out-flow of the business concern during a
particular period of time.
“cash flow statement, also known as
statement of cash flows, is a financial statement
that shows how changes in balance sheet accounts
and income affect cash and cash equivalents, and
breaks the analysis down to operating, investing,
and financing activities.”
• To provide information about the cash inflows and
cash outflows from operating, financing and
investing activities of the firm.
• To show the impact of the operating, financing
and investing activities on cash resources.
• To explain the causes for changes in cash balance.
• To identify the financial needs and help in
forecasting future cash flows.
Objectives Of Study
Importance of Study
This Project will help company to find it’s
weakness and strength, and also the areas where
they can improve.
It will help company to decide the future direction
of the company.
It will help company in improve its financial
It gave me opportunity to apply theoretical
knowledge obtained from college in a practical
manner in the actual business environment.
LIMITATIONS OF STUDY
Cash flow statement cannot replace the income
statement or the fund flow statement. Each of them
has a separate functions to perform.
Being a vast topic it is not possible to cover all the
matters and aspects related to analyzing of financial
Cash flow statement cannot be equated with the
The data undertaken is of last two years , therefore
we fail to get the whole financial history of the
Scope of Cash Flows Statement
1. Cash flow is a financial statement that presents
information about the company's.
2. The general form of the cash flow statement shows three
categories, namely: cash flow from operating activities,
cash flows from investing activities & cash flows from
3. Operating activities are the principal revenue-producing
activities of the company and other activities that are not
investing activities and financing activities.
4. Investment activity is the acquisition and disposal of
long-term assets and other investments that do not
include cash equivalents.
Importance of cash flow
1.The statement cash flow is based upon, to get
the information about the cash receipts and
the cash payment during a period.
2.The preparation of cash flow statement is
very much useful to management.
3. It is one of the three main financial statement
a) Balance sheet.
b) Income statement
c) Cash flow statement.
Needs of cash flow Statement
1) Knowledge Of Magnitude : -
The cash flow statements provide us information
regarding cash generated and used in operating, investing
and financing activities.
2) Tool Of Planning : -
Cash flow statement is used as the basis for
projection of future investment and financing plans of
enterprise by management.
3) Tool Of Historical Analysis :-
The financial decision taken in the past can be
evaluated on the basis of information supplied by cash
Types of Cash Flow Activities
1. Operating activities:- Involve the cash effects of
transactions that enter into the
determination of net income.
2. Investing activities:- Concern with buying and selling
property, plant and equipment.
3. Financing activities: - Include issuance and reacquisition
of a firm's debt and capital stock,
From sale of goods and services to
Payment of employee
Receipt from royalties, fees,
commission and other revenues.
Pay operating expenses.
Payment of taxes.
Sale of property, plant,
Receipt from Interest
Purchase of property,
plant, equipment and
Proceeds from issue of
preference or equity shares.
Proceeds from Issuance of
Redemption of preference shares, buy
back of equity shares.
Payment of dividends and interest.
Procurement of loans.
Classification of Cash inflows and Cash Outflows Activities:-
1. Financial Management –
By Dr. R M Shrivastava, Pragti Publication Meerut.
2. Financial Management Principal and Practice –
By G Sudharasana Reddy.
3. Principal of Management –
By Poonam Gandhi
4. Website:- WWW.GOOGLINK.COM