Page 69 - MAZOO EBOOK 1_Neat
P. 69
1.11
Analyzi
ng
financi
al
statem
ents
S
t
a
t
e
m
e
nt of cash flows (categories of cash, methods of preparing statement of cash flows and the
Importance)
Categories - The three categories of cash flows are operating activities, investing activities, and
financing activities. Operating activities include cash activities related to net income. Investing
activities include cash activities related to noncurrent assets. Financing activities include cash
activities related to noncurrent liabilities and owners’ equity.
Methods of preparing statement of cash flows – There are two methods of preparing cash flow
1- Direct Method and 2- Indirect Method.
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