Financial talk

The Cash Flow Statement is made up of three sections. The first section is operating activities. Operating activities include your company’s profit or loss and non-cash items that affect your profit without affecting cash. Examples of these types of non-cash expenses are depreciation and bad-debt expense. Also included in this section are changes to your operating assets and liabilities. Operating assets and liabilities include accounts receivable, prepaid expenses, accounts payable and accrued liabilities. A common feature of operating assets and liabilities is these items have been reflected in the Profit & Loss Statement in a period different from the period in which they were paid.

The second section of the