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Cash Balance on Cash Flow Statement

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When building a financial statement model, the total cash balance calculated on the cash flow statement (cash from operating + financing + investing activities):

1. Must equal cash flow balances inputted on the balance sheet
2. Will always exceed cash flow balances inputted on the balance sheet by cash from operating activities
3. Will always trail cash flow balances inputted on the balance sheet by cash from operating activities
4. None of the above

Please select only 1 option out of the 4 listed above.

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Solution Summary

The answer to this problem explains how the cash balance on the cash flow statement is found and presented. The references related to the answer are also included.

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Please understand that the statement of cash flow is prepared from balance sheet accounts. Changes in assets, owner's equity, and liabilities are reflected in the statement of cash flows. It follows that the change ...

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  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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