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    pheonix's Avatar
    pheonix Posts: 1, Reputation: 1
    New Member

    May 23, 2007, 07:25 PM
    How do I prepare an indirect statement of cash flow
    How do I prepare an indirect statement of cash flow. :rolleyes: :eek:
    Clough's Avatar
    Clough Posts: 26,677, Reputation: 1649
    Uber Member

    May 24, 2007, 12:19 AM
    Perhaps what you find on the following site will be of help to you.

    Managing Your Cash Flow

    From the same site as above:

    VII. Indirect Method

    Popular because of its relative simplicity, the indirect method has you start with a figure for net income (from your income statement) and helps you adjust this accrual amount for any items that do not affect cash flows. There are three basic types of adjustments:

    Revenues and expenses that do not involve cash inflows or outflows (e.g. cost allocations such as depreciation and amortization)
    Gains and losses on events reported in other sections of the statement of cash flows
    Conversions of current operating assets and liabilities from the accrual to the cash basis
    Note: When determining the change in current assets do not include the cash and cash equivalent accounts.

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