It is imperative that the time interval (or period of time) be shown in the heading of each income statement, statement of stockholders' equity, and statement of cash flows.
As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills.
Free cash flow is calculated by subtracting a company's capital expenditures from its cash from operations, two metrics that are found on the (underappreciated) statement of cash flows.
Certain requirements associated with the disclosure of impairment of assets, financial instruments, fair value measurement, statement of cash flows and the presentation of financial statements will also be exempt.
Large businesses must also establish, as part of their annual report, a statement of cash flows, distinguishing cash movements for operating, investing and financing activities.
Funds from operations is calculated using cash flow from operating activities as presented in the statement of cash flows, before changes in non-cash working capital.
