Return

Every Statement of Cash Flows will be slightly different depending upon the nature of the firm's balance sheet, but below is illustrated a fairly typical such statement: (all figures in $ millions)

Operating Activities:  
Net Income before dividends
$102.0
Adjustments:
Noncash adjustments

Depreciation

95.0
Due to Changes in working capital

Increase in accounts receivable

(90.0)

Increase in inventories

(175.0)

Increase in accounts payable

65.0

Increase in accruals

15.0
Net cash provided by operating activities
$12.0
 
Investing Activities:
Cash used to acquire fixed assets
$(250.0)
 
Financing Activities:
Sale of short-term investments
$42.5
Increase in notes payable
55.0
Increase in long term debt
200.0
Dividends paid
(80.0)
Net cash provided by financing activities
217.5
 
Summary:
Net change in cash
(20.5)
Beginning Cash
52.0
Ending Cash
$31.5

The indicated ending cash balance should equal the cash shown on the balance sheet, but notice how quickly your eyes move to the major categories of cash inflows and outflows due to the arrangement above. Such analysis was previously done on a "funds" rather than cash basis and often called a 'where got-where gone' statement. The formal Statement of Cash Flows provides more useful information since the management of a firm is always concerned about cash flows and the ability to sustain them over time.