The Cash Flow Statement, is one of the three main financial statements used to understand a company's financial health. It shows how much cash a company generates and spends during a given period. It's divided into cash flows from operating activities, investing activities, and financing activities.
While the basic definition gives an overview, let's dive into each section. The Cash Flow from Operating Activities includes cash received or spent on the core business operations. It's derived from net income, adjusted for non-cash items like depreciation and changes in working capital.
The Cash Flow from Investing Activities shows the money spent on long-term assets, like property or equipment, and money received from selling these investments.
The Cash Flow from Financing Activities reflects changes in loans, dividends and equity. It shows how a company raises capital and pays it back to investors through capital markets.
These three sections combined give a complete picture of where a company's money is coming from, and where it's being spent.
For Amazon, Cash Flow from Operating Activities includes cash from sales of products and services, less operating expenses like costs of sales, marketing, and administration. Investing activities include cash spent on buying new warehouses or technology. Financing activities include cash from issuing shares or debt, less any repayments or dividends.
Exxon Mobil's Cash Flow Statement includes cash from operating activities like oil and gas production, less operating expenses. Cash from investing activities includes money spent on new exploration or extraction equipment, while financing activities include cash raised from issuing shares or debt and any dividends paid.
For Apple, Cash Flow from Operating Activities is mainly cash from sales of their products and services, less operating costs. Investing activities include cash spent on research and development or new equipment. Financing activities reflect cash from issuing shares or raising debt, less dividends paid and shares repurchased.