Preparing a cash flow statement involves several steps:

 Preparing a cash flow statement involves several steps:

Operating Activities: Start with the net income from the income statement. Adjust it by adding back non-cash expenses (like depreciation) and deducting non-cash revenues. Then, adjust for changes in working capital (like changes in accounts receivable, accounts payable, and inventory).

Investing Activities: List all cash flows related to buying or selling long-term assets, like property, equipment, or investments. Include both cash inflows and outflows.

Financing Activities: Document cash flows related to borrowing or repaying debt and issuing or buying back stock. Include dividends paid to shareholders.

Net Cash Flow: Calculate the net cash flow from each of the three categories: operating, investing, and financing activities. Sum them up to find the total net cash flow for the period.

Beginning and Ending Cash Balance: Add the net cash flow to the beginning cash balance to get the ending cash balance for the period.

Presentation: Present the cash flow statement in a standard format, typically in three sections: operating, investing, and financing activities. Include a reconciliation of the beginning and ending cash balances.

Ensure that the cash flow statement follows the relevant accounting standards (e.g., GAAP or IFRS) and accurately reflects the company's cash inflows and outflows during the reporting period. It's an essential tool for assessing a company's liquidity and financial health.

Added or subtracted in each section :-

Certainly, here's a breakdown of items typically added or subtracted in each section of the cash flow statement:

Operating Activities:

Added (Inflows):

Net income from the income statement.

Depreciation and amortization (added back because they are non-cash expenses).

Any gains on the sale of assets.

Interest received.

Dividends received from investments in other companies (if applicable).

Less (Outflows):

Any losses on the sale of assets.

Interest paid.

Income tax paid.

Payments to suppliers and employees.

Changes in working capital, like increases in accounts receivable, inventory, and prepaid expenses, which represent cash outflows, or decreases in accounts payable, which represent cash inflows.

Investing Activities:

Added (Inflows):

Proceeds from the sale of long-term assets (e.g., property, equipment).

Cash received from the sale of investments.

Principal repayments on loans made to other entities.

Less (Outflows):

Cash spent on purchasing long-term assets.

Cash used for purchasing investments.

Loans made to other entities (if applicable).

Financing Activities:

Added (Inflows):

Proceeds from issuing new debt (e.g., bonds or loans).

Proceeds from issuing new equity (e.g., common stock).

Less (Outflows):

Repayment of debt (principal payments).

Repurchase of company's stock (treasury stock).

Payment of dividends to shareholders.

Remember, these are general guidelines, and the specific items included in each category can vary depending on the company's operations and accounting practices. Always refer to the relevant accounting standards (GAAP or IFRS)