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Accounting
Grade 12
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SESSION 6: CASH FLOW STATEMENT
KEY CONCEPTS:
In this session we will look at:
- Companies Financial Statements
- Cash Flow Statements
X-PLANATION
Companies Financial Statements:
Cash Flow Statement:
The cash flow statement reflects the movement of cash within an enterprise during a
specific period. The Companies Act stipulates that a cash flow statement must be
part of the company’s financial statements
The purpose of doing the cash flow statement is to:
Determine the cash inflows for the financial period and their sources
Determine the cash outflows for the financial period and what it was spent on
Determine the net effect of the changes in cash
Prepare it as part of the published financial statements of a public company
Help assess the liquidity of the company
How were capital developments projects financed?
Does the company generate sufficient cash from its operations to maintain its
current operating capacity
Some users of the Cash Flow Statement:
Management
Directors
Banks
Investors
INCOME
STATEMENT
BALANCE
SHEET
CASH FLOW
STATEMENT