Cash flow statement also known as statement of cash flows shows inflow and outflow of cash and it is divided into three categories- operating, investing and financing activities. The operating cash flow shows the position of cash from the operations of the company. To explain: The changes in the current liabilities and current assets can affect operating cash flow when the sales decline, in the short run and in the long run.

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Chapter 11, Problem 61.4C

To determine

Concept introduction:

Cash flow statement also known as statement of cash flows shows inflow and outflow of cash and it is divided into three categories- operating, investing and financing activities. The operating cash flow shows the position of cash from the operations of the company.

To explain:

The changes in the current liabilities and current assets can affect operating cash flow when the sales decline, in the short run and in the long run.

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