Cash Flow Statements - Direct and Indirect Method
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A cash flow statement can be presented using two methods:
- Indirect Method
- Direct Method
The two methods differ in terms of how the cash flow from operating activities is calculated.
In the indirect method, the operating cash flows are not directly reported. Instead you start with the net income taken from the income statement and then adjust it for the items that do not affect the cash flows. The adjustments will be made for:
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