Preparation Of Cash Flow Statement

The cash flow statement is prepared by showing inflows and outflows of cash from a major activities of a firm. The activities that result in cash inflows are referred to as sources of cash and the activities that result into cash outflows are referred to as uses of cash. For the purpose of preparing cash flow statement,the firms activities are classified into three categories that result into inflows and outflows of cash.

1. Cash Flow From Operating Activities
* Direct Method
* Indirect Method

2. Cash Flow From Investing Activities

3. Cash Flows From Financing Activities