Cash Flow Statement:
Net Increase/Decrease in Cash Calculation
Q: How is the figure for net increase/decrease in cash calculated or arrived at?
A: To calculate the net increase/decrease in cash you simply add up the totals of the three sections:
- Cash flow from operating activities
- Cash flow from investing activities
- Cash flow from financing activities
In the cash flow statement above we calculate the net increase or decrease in cash flow as follows:
Net cash flow from operating activities + Net cash flow from investing activities + Net cash flow from financing activities
= $24,800 + (-$9,000) + $13,000
Hope that makes sense now!
Note that the cash at the beginning and at the end of the period is just included as part of the end of the report as sort of breakdown of the net increase/decrease in cash flow during the year.
All the best!