Cash Flows Frompome By Gautam Koppala
Author: GAUTAM KOPPALA
A revenue or expense stream that changes a cash account over a given period in your Project. Cash inflows usually arise from one of
three activities - financing, operations or investing - although this also occurs as a result of donations or gifts in the case of personal
finance. Cash outflows result from expenses or investments. This holds true for both Projects and personal finance.
Because many people view cash as indicative of a business's financial well-being, a great deal of attention is directed toward cash,
cash management, cash availability, and a range of other issues surrounding cash and cash equivalents. The third major financial
statement, the Statement of Cash Flows, represents an effort to present the management of cash in a manner that can be understood
by the various interested parties.
Over the years this interest in cash has gone through an evolution, from a relatively simple Sources and Uses of Cash statement to the
Cash Flow Statement to today's Statement of Cash Flows in a form that addresses the interests of management, lenders, and
investors in the same document.
The Statement of Cash Flows summarizes the changes in the Balance Sheet during the reporting period, separated into transactions
reflecting operating activities, investing activities, and financing activities. It identifies where the company got the funds it used and what
it did with them, and it facilitates assessment of management's effectiveness in directing the business.
The results of the Statement of Cash Flows reflect the change in the cash balances of the company. If an item, or a total, is negative, it
represents cash outflow; if positive, it reflects inflows. On the following pages we present and describe the basic elements of the
Statement of Cash Flows.
For internal management each contributor to cash flow may be computed separately as part of an effort to track amounts and causes
and consequences. This detailed approach is known by some as the Di