Cash flow statement reports cash generated and spent during specific period. Acts as bridge between income statement and balance sheet. Companies can choose direct or indirect presentation method. Most companies use indirect method
Corporate finance deals with funding sources and capital structure to maximize shareholder value. Two main sub-disciplines: capital budgeting and working capital management. Investment banking evaluates companies' financial needs and raises appropriate capital
Operating cash flow represents cash generated from normal business operations. First section of cash flow statement showing cash from investing and financing. Helps assess company's ability to maintain operations without external financing
Cash flow statement tracks cash inflows and outflows to assess company financial health. Complements balance sheet and income statement as one of three main financial statements. Helps creditors determine company's liquidity and investors assess financial stability
IRR is a discount rate making NPV equal to zero in discounted cash flow analysis. Calculated using same formula as NPV but with different cash flow types. Initial investment is always negative, subsequent flows can be positive or negative
IAS 7 replaced IAS 7 Statement of Changes in Financial Position in 1977. Standard requires presentation of cash flows classified by operating, investing and financing activities. Cash flows provide basis for assessing entity's ability to generate and use cash