Cash Flow Statement Example-direct method

Cash Flow Statement using direct method is the favored method and presents cash flows from activities through a summary of cash outflows and inflows. However, this is not the method preferred by most firms as it requires more information to prepare. Under the direct method, cash flows from operating activities are strong-minded by taking cash receipts from sales, adding interest and dividends, and subtracting cash payments for purchases, operating expenses, interest and income taxes.

Cash Flow Statement

Cash Flow Statement Definition and Explanation of Cash flow statement: The purpose of the statement of cash flows is to highlight the major activities that directly and indirectly impact cash flows and hence affect the overall cash balance. Managers focus on cash for a