What is the term cash flow statement
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In general, the statement of cash flows will be as wellCash flow statement designated. The aim of such a calculation is to achieve a certain transparency via all internal companyCash flows to accomplish. Changes With regard to liquidity, one should also work out the causes of corresponding changes.
Definition of the cash flow statement
In principle, the term cash flow statement is quite misleading. According toCapital definition this is not liquid. It is only within a period of one year slightly movable. A much better name for the cash flow statement would be the termCash flow statement, which among other things in the Switzerland is used, but not established in this country. Statutory or standardized There are currently no definitions for the cash flow statement. The functions are very diverse and can be in-house customize. Nevertheless, there are certain national and international standards that serve as a point of reference. In general, the cash flow statement provides ample information on the general Financial situation of a company and about the use financial resources. In this context, the cash flow calculation is considered special, important and extremely meaningfulAdditional instrument used for the assessment of a company from the financial point of view. It can be said relatively roughly that the cash flow statement not only records the development, origin and use of financial resources, but also records them Deposits and withdrawals very structured.
Deposits and withdrawals are compared
In a nutshell: Put very simply, the cash flow statement is a detailed one Juxtaposition of Deposits and Payouts, within a certain Billing period. The aim is to provide extensive information on the actual and current Financial strength of a company.
Retrospective and prospective cash flow statement
Within the financial sector, theretrospectives and theprospectiveCash flow statement differentiated. The retrospective variant is based on the Past. These are the basis Annual accounts. In principle, they are retrospective cash flow statementsobjectively verifiable. However, they cannot be consideredForecasting toolcan be used. In comparison, the prospective cash flow statement uses thePlan profit and Loss accounts. This is also called "financial plan. The focus is on future the company. The prospective cash flow statements are primarily used by forecast and the Planning. It is used to assess future solvency.
Structure and content of a complete cash flow statement
As already mentioned, in the cash flow statement, all incoming and outgoing payments are a certain period most precise
What are the two methods?
respect and juxtaposed. There is also a corresponding Assignment instead of. In practice, two different methods have been established for this. On the one hand there is the direct and on the other hand the
indirect method. At the most common one uses the indirect method.
+ Indirect method:
In the indirect The method of cash flow statement is the one used Annual surplus essential. This is going throughnon-cash Corrected expenses. In addition, there is aOffsetting the cash income instead. This comparatively simple calculation results in the cash flow for the current business activity. The cash flow is then calculated fromInvestment activities, whereupon the calculation of the cash flow from financing activities takes place. The calculated cash flows are interrelated added and possible changes in value due to exchange rates adjusted. The resulting sum must match the periodic opening balance can be added, which results in the level of financial resources onEnd of period results.
+ Direct method:
In the direct The method of the cash flow statement is the annual surplus from the Profit and Loss statement irrelevant. Instead, look at changes that are made internal Payouts and deposits result. This information can only be found in the annual financial statements conditionally emerged. All deposits made by customers from Produce sales or from other services are added together and the payments made, for example to suppliers, reduced. The cash flow results from this simple calculation operational Activity. The cash flow from investing activities is then determined as with the indirect method. Also the cash flow from theFinancing activity is calculated in the direct method as in the indirect method. The final calculation of theFinancial middle classis also carried out as with the indirect method.
Three levels of cash flows
Which payment flow is the right one?
Starting fromCommercial Code the cash flow statement is an important part of the Consolidated financial statements. According to the recommendations of DRS 2, the cash flow statement shouldthree take into account different cash flows. This includes the cash flow from operating activities, i.e. the operating cash flow, the cash flow from investing activities and the cash flow from financing activities.
Level 1: Calculation of the cash flow from operating activities (indirect method):
Profit or loss for the period before deduction of extraordinary items
+/- write-downs or write-ups from the existing fixed assets
+/- Increase or decrease in accrued liabilities
+/- further income or expenses that are non-cash
+/- Loss or profit resulting from the disposal of fixed assets
+/- Decrease or increase in inventories, as well as receivables resulting from services and deliveries and other assets that cannot be allocated to financing and investment activities
+/- deposits and withdrawals resulting from extraordinary items
= Cash flow from operating activities or operating cash flow
Level 1: Calculation of the cash flow from operating activities (direct method):
+ Deposits from customers
- Payouts that go to suppliers or business partners, for example
+ further payments that do not come from investment or financing activities
- other payments that do not result from investing or financing activities
= Cash flow from operating activities or operating cash flow
Level 2: Calculation of the cash flow from investing activities
All deposits made fromProperty, plant and equipment disposals result
- Payments that are used to invest in property, plant and equipment
+ Payments from intangible fixed assets disposals
- Payments that are used to invest in intangible assets
+ Payments resulting from disposals from financial assets
- Payouts that are used to invest in financial assets
+ Payments that are justified by the sale of other business units and the sale of consolidated companies
- Payments due to the acquisition of other business units and consolidated companies
+ Deposits, through investments in funds for the short-term disposition of finances
- Payouts, by investing in funds for the short-term disposition of finances
= Cash flow from investing activities
Stage 3: Calculation of the cash flow from financing activities
Deposits made from Feedings result from equity
- Payouts made to minority shareholders or company owners
+ Deposits that come about through borrowing and borrowing
- Payouts due to the repayment of loans and bonds
= Cash flow from financing activities
How do you ultimately calculate cash flow?
Final calculation of the financial resources:
Cash generated from operations
+ Cash flow from investing activities
+ Cash flow from financing activities
+ Opening balance of the period
= Funds at the end of the period
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