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Basic cash flow statement | Finance & Capital Markets | Khan Academy finance khan academy



Using a cash flow statement to reconcile net income with change in cash. Created by Sal Khan.

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Finance and capital markets on Khan Academy: Corporations use three financial statements to report what’s going on: balance sheets, cash flow statements and income statements. They can be derived from each other and each give a valuable lens on the operations and condition of a business. After you know the basics of accrual accounting (available in another tutorial), this tutorial will give you tools you need to responsibly understand any business.

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Basic cash flow statement | Finance & Capital Markets | Khan Academy

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Basic cash flow statement | Finance & Capital Markets | Khan Academy
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25 thoughts on “Basic cash flow statement | Finance & Capital Markets | Khan Academy finance khan academy”

  1. no, wait, I see the "missing" 200: changes are Assets, Cash -200, A/R +400 // Equity, +200. I don't think some of my Business Ed 10s will get this, but some will !

  2. me too, I don't see enough in Sales Revenue to account for "A/R of $400" AND the Income said to be $200 (without including the A/R). Wouldn't Income have to be $600 to make room for both? clearly something else is going on, investments or financing cash in there? though I don't know enough to be able to use this to confidently. Motivation, I'd like to show Grade 10s simplest concepts of Cash Flow, to "show them" how Cash Flow statement is going to work in their little business plan. Ah well.

  3. I noticed that there is a $200 change in Equity from B.S. end of period 1 to B.S. period 2. Therefore, I think you should have included a Cash Flow Financial Activity(CFFA). Maybe it was stock sales or debt issued(IBD)? We know total cash flow is -200, but if we include CFFA I don't think we will get the same answer so I'm a confused.

  4. @chocoboblue99 Weeelllllll, as far as big business's are concerned, GAAP does a pretty good job as to how simple a 10k filing actually is. A major corporation has so many different avenues of cash flow it is actually pretty amazing how consolidated they can concentrate all the activity. Also, there are blanks because there is simply not enough activity in that account to justify making a note of it.

  5. Okay, I get it. Wow, it's good to understand the simple concept first before actually seeing a REAL Cash Flow Statement.

    When I look corporations' CF statements they just have numbers going all over the place. Also, I don't know, sometimes, they don't even fill in all the information, they leave it blank. Then, I calculate the numbers and don't equal the totaled that they report. I think they omitted it. Real statements are so complicated. I wish they would keep it simple.

  6. @phoebus1011
    didnt noe engineers studied eco or history; altho i noe there are untraditional engineers, i.e. natural sciences, finance or computing… but yet, if you know engineering, you should have the capacity to understand anything else quite easily

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