Summary
In this chapter, you have learned about the importance of the cash flow statement. You have understood the different elements of the statement and how to calculate them. You also learned that cash flow from operations gives an indication of the company's ability to generate sufficient funds for its operations, and movement in working capital makes adjustments to convert accruals-based accounting to cash-based accounting.
We have seen how to extract cash flow from financing and investing activities and finally, we have seen how to arrive at the closing cash balance for the year and use this to balance out the balance sheet.
We have now concluded the three-statement model, and in the next chapter, we will perform some ratio analysis to gain further insight into the projected performance of the company.
