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.

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, ...

The direct method of preparing a cash flow statement differs from the indirect method only in the operations section. The investments and financing sections are identical.

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

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

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

Learn the key components of the cash flow statement, how to analyze and interpret changes in cash, and what improved free ...

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, such as applying for a business ...

For example, if your cash flow statement shows operating cash flow of $400,000 and net revenue of $1 million, you end up with 0.40. It means that the company generates 40 cents in cash from ...