How the Cash Flow Statement Is Used. The cash flow statement paints a picture as to how a company’s operations are running, where its money comes from, and how money is being spent.

Companies use financial statements -- income statements, balance sheets and cash flow statements -- to track and assess their operational and financial performance. According to a survey ...

Regardless of whether the direct or the indirect method is used, the operating section of the cash flow statement ends with net cash provided (used) by operating activities. This is the most ...

Ensure that the ending cash balance matches the balance sheet's cash account. ... As mentioned previously there are two ways to build a cash flow statement: the direct method and the indirect method.

The Advantages of the Direct Method of Cash Flow. ... the balance sheet, income statement and statement of cash flow. Managers have some discretion in the methods they use to prepare these ...

The offset to the $500 of revenue would appear in the accounts receivable line item on the balance sheet. On the cash flow statement, ... Examples of the direct method of cash flows from operating ...

Subtracting $75,000 from the $100,000 in sales revenue yields an OCF of $25,000 for the year using the direct method. ... have to use the indirect method on their annual cash flow statements.