Corporatefinanceinstitute com 1 The Corporate Finance Institute Accounting For more eBooks please visit

Statement of Cash Flows 
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corporatefinanceinstitute.com
64
The Corporate Finance Institute
Accounting
Direct vs Indirect Method of Presentation in Operating Section
Direct Method 
Operating Activities
Cash received from customers
$800
Cash paid to suppliers
(150)
Employee compensations 
(200)
Other operating expenses paid
(250)
Net cash from operating activities
200
Investing Activities 
Sale 
of 
land 
200
Purchase of equipment 
(300)
Net cash from investing activities 
(100)
Financing Activities 
Common share dividends
(200)
Payment on long term debt
(300)
Net cash from financing activities 
(500)
Beginning Cash Balance 
X
Ending 
Cash 
Balance 
Y
Indirect Method 
Operating Activities 
Net 
Income 
$50,000
Add: Depreciation expense 
$10,000
Decrease 
in 
AR 
2,000
Increase 
in 
inventory 
3,000
Decrease in prepaid expense
4,000
Increase in accounts payable
5,000
Net Cash provided by operating activities 
$XXX

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corporatefinanceinstitute.com
65
The Corporate Finance Institute
Accounting
Investing Activities 
Sale 
of 
land 
200
Purchase of equipment 
(300)
Net cash from investing activities 
(100)
Financing Activities 
Common share dividends
(200)
Payment on long term debt
(300)
Net cash from financing activities 
(500)
Beginning Cash Balance 
X
Ending Cash Balance
Y