Imagine a company such as General Electric using the direct method to prepare its cash flow statement, which essentially is like going through the company's entire bank statement.

Under generally accepted accounting principles, the cash flow statement can be prepared using one of two practices: the direct method or the indirect method.

The cash flows, in and out, resulting from financing and investing activities are listed in the same way whether the direct or indirect method of presentation is employed.

Direct vs. indirect methods of preparing a cash flow statement: The direct method focuses on going through individual transactions and compiling income and expenses.

The direct method uses gross cash receipts and gross cash payments to prepare cash flow statements. This includes money paid to suppliers, receipts from customers, interest and dividends received, ...

Compare India's Accounting Standard 3 (AS 3) and Ind AS 7 on cash flow statements. Learn about their objectives, classification methods, and key differences in reporting ...

Cash flow statements are used to monitor the incoming and outgoing cash and cash equivalents of a company. See a cash flow statement example.

Explore the fundamentals of cash flow statements, including their structure, significance, and the insights they provide into a company's financial health in 2025.

What is a cash flow statement? A cash flow statement — also called a statement of cash flows — is a financial document showing how money flows in and out of a business. Common financial activities, ...