Cash Flow Statement Basics Explained

Dive into the world of finance with our comprehensive guide on understanding the cash flow statement. Often overlooked yet vital, the cash flow statement reveals the effectiveness of a business in managing its cash. It's crucial for assessing a company's financial health.

The Cash Flow Statement is one of the 3 main Financial Statements. It will show you how effective a business is in managing its cash.

✨ Key Highlights:
▪️ Cash Flow Statement Basics: Learn why the cash flow statement is an essential financial statement, alongside the income statement and balance sheet.
▪️ Three Main Sections: Explore the three parts of the cash flow statement: Operations, Investing, and Financing activities, and understand how each affects a company's cash flow.
▪️ Operations Cash Flow: Discover the two methods to calculate this - the direct and indirect methods - and why adjustments like depreciation, amortization, and working capital changes are crucial.
▪️ Investing and Financing Activities: Understand how cash flow from investing and financing activities is reported, including purchases of assets, issuing shares, and paying dividends.
▪️ Reconciliation to Balance Sheet: See how the cash flow statement ties back to the balance sheet, ensuring that the cash flow reported matches the net change in cash.

Most companies apply Accrual Accounting and it's important to understand that under this method revenue does not always equal cash in, and incurred expenses do not equal cash out. Therefore, don't make the mistake to just look at the income statement and the balance sheet. Focus on the Cash Flow Statement as well because it will show you where the company makes and spends its money.

00:00 How to Read a Cash Flow Statement
02:00 Cash Flow Statement - Overview
03:57 Cash Flow from Operating Activities
10:33 Cash Flow from Investing Activities
11:17 Cash Flow from Financing Activities

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#Accounting

[kossiviamouzou]

Leila, we need a complete accounting course like this, from beginners to advance. Accounting is hard to understand sometimes, but with you, everything gets better.

[andrewmaina]

In all honesty, this is by far the best tutorial I have seen and come across on this topic, thank you so much Leila, simply incredible.

[thetourminator]

Well, this def legit would have come in handy when I was taking my accounting classes, LOL. For you folks who are in the thick of learning this in school, take my advice and watch this video at least twice, maybe more. Understanding and creating a CASH FLOW STATEMENT was one of the 'top 5 most difficult concepts' during my entire bachelor's degree classes.

[aidansan]

Good job I love how you explain things with examples makes it easier to understand

[latino]

Leila, you're A-M-A-Z-I-N-G. Thank you so much! I really appreciate how well thought the explanation was ( probably took a while to script) and how professional your video is! Real life examples help a lot. Many finance people tell you how it works, but they don't reference a real co's cashflow. Us newbies, have then a hard time taking the advice and applying it to understanding a company. Many Thanks again!

[sarojsuwal]

Just as brilliant as always, Waiting to watch this kind of videos more in the future. Thank you Leila Gharani for the uploading such a useful video.

[wmfield]

Kudos for taking on a complicated but very important subject. It is vital to the Excel user who wants to do more than just tweak sales figures. It's great to have an instructor to go to with a such broad and practical knowledge. Thanks L!

[marvelgaming]

I am really glad I found this channel !
AMAZING

[Probity]

Hands down the BEST Financial Accounting video on You Tube!! Presented brilliantly, eloquently, it’s engaging and so easy to follow. Finally found a tutor I can understand! THANK YOU Leila.

[jaynefranzinoromero]

I've been taking the online courses, getting the certificates, then I always return to Leila's videos for a deeper understanding of the topic. Thank you, Leila!!

[venusliquit]

Very clear explanation on cash flow. Thank you so much Leila, you are making a complex report into a simple one.👏👍

[erickbourdin]

Thank you for this very clear and neat video. I am amazed by your illustrations serving perfectly your talk !
Awesome as always !

[jske]

This was super easy to understand for someone who hasn't done a CF in a decade. Thank you!

[sachinrv]

Best explanation of Cash Flow. Even, non finance / accounting people can follow it easily. Thanks Leila :)

[islamhussein]

Thank you so much, now I understand the cash flow statement 🙏👍

[WorldWideSkboarding]

This is excellent, I like how you went into more detail than other videos.. Dont be scared to make longer ones! and ones involving analysis, would love to see those

[bonniegrier]

I have to say this is by far the best online video I have seen. It really breaks things down so it is easier to understand for anyone.

[jamesperry]

_This is a great video with simplicity and clarity of definitions and explanation. Great voice clarity btw._ TᕼᗩᑎK YOᑌ Leila Gharani.

[jorgesantanderm]

This is the best for understanding the CF, thank you very much Leila! Hope more people see this video
:)

[TramNguyen-wxjc]

Thank you so much! This video is very super easy to understand and helpful for my accounting class.