Statement of Cash Flows - Indirect Method

Question 1

Indirect Format

Answer 1

Starts with net income

Eliminate Non Cash Items (add Depreciation, Amortization)

Eliminate Non Operating Items (subtract Gains, add Losses)

You then arrive at Cash Flows from operations

Question 2

Reporting Cash Flows from operations (Convert from Accrual to Cash Basis)

Answer 2

Add Increase in Liabilities and Decrease in Assets (Cash Savings)

Subtract Decrease in Liabilities and Increase in Assets (Cash Usage)