Cash Flow Statement Tutorial: Direct vs Indirect Method Explained

Описание: What is a cash flow statement?

One of the big 3 financial statements in the overall financial which includes the income statement balance sheet and cash flow. The cash flow statement reflects how the company is managing its cash which is different from the income statement and profitability. It details what cash has been generated from operations, how it was invested and how the business is being financed.

We'll cover:
✅ What the Cash Flow Statement is
✅ The three sections: Operating, Investing, and Financing activities
✅ 2 different methods
✅ How prepare and review both methods

What are the 2 types of cash flow statements?
✅ Direct Method - the direct method requires the presentation of major categories of cash receipts and payments
✅ Indirect Method - begins with net income which is then adjusted for changes in balance sheet accounts to arrive at the amount of cash generated or used

Cheat Sheet for Indirect Method ➡️    • Запись  

While ASC 230-10-45-25 encourages the use of the direct method, the large majority of reporting entities elect to use the indirect method.

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Disclosure Disclaimer: The information in this video is provided for general education purposes only and may not reflect changes in federal or state laws. This video is not intended to provide advice. Please consult with a professional advisor about your facts and circumstances

0:00 Introduction
0:59 Direct Method Cash Flow Statement
8:53 Indirect Method Cash Flow Statement