Accounting › Section O · Cash flows and statement analysis › Topic O.1

Operating, investing, and financing activities

A profitable company can still run out of cash and fail. The statement of cash flows shows where a business's cash came from and where it went, sorted into three activities that tell very different stories about its health.

In this topic

  • Profit is not cash
  • What the statement explains
  • Operating activities
  • Investing activities
  • Financing activities
  • US GAAP rules and IFRS choices
  • Noncash investing and financing activities
  • Worked example: classifying transactions
  • Worked example: from activities to ending cash
  • Common mistakes to avoid
  • Key takeaways

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