Section 3: Additional Statements

There are typically two other statements that are part of the standard financial statement package. The Cash Flow Statement lays out the cash inflows and outflows for an organization over a period of time and groups the cash activity in terms of operating, investing, and financing activities. It is helpful to show investors how a company’s cash position has changed over a period of time and what is driving those changes. The Statement of Equity expands on the ownership interest in the company and shows the makeup of the capital invested in the company.

This article below explains several other statements, including:

1.  Statement of Stockholders' Equity, and
2. Statement of Cash Flows (SCF)

Reflections

The article names a fictional company, ABC Corporation, to calculate its cash flow in several examples. Towards the bottom, it explains the concept of free cash flow.  Using what you learned, can you understand what the resulting number, $21,000, that is shown at the very bottom of the article, explains about the company's cash flow?