cash flow statement

A cash flow statement is a financial report that shows incoming and outgoing money during a particular period (often monthly or quarterly). It does not include non-cash items such as depreciation. This makes it useful for determining the short-term viability of a company, particularly its ability to pay bills. People and groups interested in cash flow statements include:

Accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses
Potential lenders/creditors, who want a clear picture of a company's ability to repay
Potential investors who need to judge whether the company is financially sound
Potential employees or contractors who need to know whether the company will be able to afford compensation

Cash flow statements are particularly important for start-up companies with limited liquid assets. These companies are vulnerable to devastating cash shortages, even when Accounts Receivable balances point to long-term financial health.

Statement of Cash Flows

   Statement of Cash Flow for the period 1/1/xx to 1/1/xx+1   Cash flow from operations (CFO)      +/-  x x   Cash flow from investing (CFI)       +/-  y y   Cash flow from financing (CFF)       +/-  z z   Equals change in cash account      = change of cash balance   + Beginning of period cash         + Beginning cash   = Ending cash balance              = Ending cash

Operating activites

Investing activities

Financing activities

Dividends paid
Sale purchase of stock
Net borrowings

Preparation methods

Direct Method
Indirect Method

Examples

Citigroup Incorporated cash flow: (http://finance.yahoo.com/q/cf?s=C&annual) (http://www.citigroup.com/citigroup/fin/ar.htm)

b>Cash Flow (In millions of dollars)
colspan="1" \| Period Ending	31-Dec-03
colspan=2 \| Operating Activities, Cash Flows Provided By or Used In
Net Income	align="right"\| 17,853
Adjustments To Net Income	align="right"\| 13,260
Depreciation	align="right"\| 2,121
Changes In Liabilities	align="right"\| 31,571
Changes In Inventories	align="right"\| -
Changes In Other Operating Activities	align="right"\| (93,847)
Total Cash Flow From Operating Activities	align="right"\| (14,854)
colspan=2 \| Operating Activities, Cash Flows Provided By or Used In
Capital Expenditures	align="right"\| (2,354)
Investments	align="right"\| (23,757)
Other Cashflows from Investing Activities	align="right"\| (20,196)
Total Cash Flows From Investing Activities	align="right"\| (46,307)
colspan=2 \| Investing Activities, Cash Flows Provided By or Used In
Dividends Paid	align="right"\| 5,773
Treasury stock acquired Paid	align="right"\| (2,416)
Issuance of long-term debt	align="right"\| 67,054
Payments and redemptions of long-term debt	align="right"\| (45,800)
Change in deposits	align="right"\| 42,136
Contractholder fund deposits	align="right"\| 8,346
Contractholder fund withdrawals	align="right"\| (5,976)
Cash flows from financing activities of continuing operations	align="right"\| 64,405
Effect of exchange rate changes on cash and cash equivalents	align="right"\| 579
Change in cash and due from banks	align="right"\| $3,823