Finance School of Management The Cash-Flow Statement Shows the cash that flowed into and from a firm during a time period Focuses attention on a firm's cash situation A firm may be profitable and short of cash Unlike the balance sheet and income statement cash flow statements are independent of accounting methods Net income is based on accrual accounting methods and affected by many judgments about issues such as how to value the inventory, depreciate the tangible assets, and amortize the intangible assets uesTc11 Finance School of Management The Cash-Flow Statement ❖ Shows the cash that flowed into and from a firm during a time period. – Focuses attention on a firm’s cash situation. ✓ A firm may be profitable and short of cash. – Unlike the balance sheet and income statement, cash flow statements are independent of accounting methods. ✓ Net income is based on accrual accounting methods, and affected by many judgments about issues such as how to value the inventory, depreciate the tangible assets, and amortize the intangible assets