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Cashflow definition6/11/2023 This section is important because it can help explain deviations in your normal cash flow. It doesn’t involve investments someone else makes into your business (those are recorded in the financing section).įor example, if you invest in a new laptop, that expense is categorized as a cash outflow for investing in the business. The next section of the statement of cash flows summarizes the investments your business has made-either into itself or into other businesses. – – – = Net Cash Flow from Operations of $9,200 Cash from investing activities Her net cash flow from operations for the quarter may look like this: Let’s go back to our freelance graphic designer friend now-here’s an example of how she would calculate her cash flow from operations. You can either use the direct method or the indirect method to calculate your cash flow from operations (but more on that later!).
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