Financials 101 for Startups – Part IV: The Statement of Cash Flows

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The purpose of the statement of cash flows is to summarize cash inflows and outflows over a period of time. It is an important statement because it can be used to assess what type of activities generated (or used) much of the company’s cash during the year. The statement of cash flows reconciles net income to the net change in cash during the period and is organized in three sections: operating, investing, and financing.

  • The operating section of the statement of cash flows shows revenue or expense items that do not provide or use cash in the current period. Examples …read more

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