# 1. Cash Flow Statement ## Diagram: Classification of Cash Flows Below is a diagram showing the classification of cash flows: ```plaintext +------------------------------------------+ | Cash Flows | +------------------------------------------+ | | | | | | | | | Operating Investing Financing | | Activities Activities Activities | +------------------------------------------+ ``` **Explanation:** - **Operating Activities:** Main revenue-generating activities (e.g., receipts from sales, payments to suppliers). - **Investing Activities:** Purchase/sale of long-term assets/investments (e.g., purchase of equipment, sale of investments). - **Financing Activities:** Activities that change the equity or borrowings (e.g., issue of shares, repayment of loans). --- ## Step-by-Step Solution to Prepare a Cash Flow Statement ### Step 1: Start with the Opening Cash Balance ### Step 2: Calculate Cash Flows from Operating Activities - Net profit before tax and extraordinary items - Adjust for non-cash items (depreciation, amortization) - Adjust for changes in working capital (increase/decrease in current assets/liabilities) ### Step 3: Calculate Cash Flows from Investing Activities - Inflows: Sale of fixed assets, investments received - Outflows: Purchase of fixed assets, investments made ### Step 4: Calculate Cash Flows from Financing Activities - Inflows: Issue of shares, debentures, loans raised - Outflows: Repayment of loans, dividends paid ### Step 5: Find Closing Cash Balance --- ## **Format of a Cash Flow Statement** ```plaintext Cash Flow Statement for the year ended 31-03-2024 A. Cash flows from Operating Activities Net Profit before tax and extraordinary items xxx Add: Depreciation xxx Add/Less: Changes in working capital xxx Less: Income tax paid xxx Net cash from Operating Activities xxx B. Cash flows from Investing Activities Sale of fixed assets xxx Purchase of fixed assets (xxx) Net cash from Investing Activities xxx C. Cash flows from Financing Activities Issue of shares/debentures xxx Repayment of loans (xxx) Dividend paid (xxx) Net cash from Financing Activities xxx Net Increase/Decrease in Cash and Cash Equivalents xxx Add: Opening cash and cash equivalents xxx Closing cash and cash equivalents xxx ``` --- ### **Final Answer** - **Diagram**: Shown above for classification. - **Step-by-step solution**: Follow the structure provided to prepare the cash flow statement for any set of data for the year ended 31-03-2024. **Note:** If you provide a set of financial data, I can prepare an actual cash flow statement for you!