Disadvantages Of Cash Flow Accounting

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Statement of Cash Flow The statement of cash flow is one of the four main financial statements. It summarizes the flow of cash in a firm over a given time period. A firm’s cash flow could be divided into three categories: operating cash flow, investment cash flow, and financing cash flow. The operating cash flow is the flow of cash that is directly related to the production and sale of the firm’s goods and services. However, the investment cash flow is the flow of cash that is related to the purchase and sale of both fixed assets and equity investments in other firms. On the other hand, the financing cash flow is the flow of cash that results in debt and equity financing transactions; those include cash inflow from the sale of stock, cash outflows to purchase stock or pay cash dividends, or incurrence and repayment…show more content…
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