Statement of Cash Flow (Direct Method)

Things to remember: 

• Decrease in Assets (A/R, Inventory, Other Current Assets) is good for cash 
• Decrease in Liabilities is bad for cash
• When calculating, place (-) sign in front of expenses

Cash Flow from Operating Activities

• Collections from Customers
  • Net Sales + decrease (or -increase) in Accounts Receivable
• Cash Paid to Suppliers
  • COGS + decrease (or - increase) in Inventory 
• Operating Expenses Paid
  • Total Operating Expenses + increase (or - decrease) in Accounts Payable
• Owner's Expenses Paid 
  • Owner's Expenses for that month
• Interest and Other Expenses Paid 
  • Other Income + Interest and Other Expenses
• Income Taxes Paid
  • Tax Expense + increase (or - decrease) in Tax Payable
• Other 
  • Δ Other Current Assets and Other Current Liabilities 

Cash Flow from Investing Activities

• Fixed Assets Investment
  • Δ Fixed Assets
• Other Investments 
  • Δ Net Intangible/Goodwill, Other Assets/Investments

Cash Flow from Financing Activities

• Debts Borrowed (Repaid) 
  • Δ Other Liability/Long term Liability
• Shareholder's Investment Paid In (Paid Out)
  • Δ Shareholder's Inv + Paid in Capital
• Owner's Distributions and Dividends
  • Δ Distributions/Dividends Paid