Direct Vs. Indirect Cash Flow Method. A company reports revenues and expenses on its income statement. Since most companies use accrual accounting, the income statement reveals little about cash ...

Discover why cash flow from operating activities is significant to businesses, and learn the direct and indirect methods for calculating it.

The two methods of calculating cash flow are the direct method and the indirect method.

A cash flow statement consists of three sections: operating, investing and financing. Companies report investing and financing activities directly on a cash basis, but often use the indirect ...

The direct method is simple and gives a basic indicator of OCF. The indirect method is more complicated but may produce a better picture of how a business generates cash from operations.

The cash flows, in and out, resulting from financing and investing activities are listed in the same way whether the direct or indirect method of presentation is employed.

A cash flow statement tells you how much cash is entering and leaving your business in a certain time period. Learn how cash flow statements work and why they're important.

Understanding cash flow statements is important because they measure whether a company generates enough cash to meet its operating expenses.