There are two methods for preparing cash flow statements: direct and indirect. Analyzing cash flow statements helps identify financial trends and potential problems. Investopedia / Matthew Collins ...

We'll also go through a real-world example ... Direct cash flow involves simply adding all of a business's cash transactions in the operating activities section of the cash flow statement.

At times, one statement may answer a question the other poses. For example ... is to determine cash flow from operating activities. One way of assessing this, called the direct method, involves ...