The cash flow statement is based on

The cash flow statement is based on cash basis and reflects the dynamic presentation of cash and cash equivalents flow information during an accounting period. Cash in cash flow statement is a broad term that includes cash and cash equivalents. Cash refers to the cash on hand and other deposits that can be used for payment at any time. Deposits that are not readily available for payment are not cash. Cash equivalents are short-term, liquid investments that are easy to be exchanged for a known amount of cash and have little risk of change. Cash flows, including cash inflows and cash outflows, are used to indicate the status of changes in the cash and cash equivalents of an enterprise. Increases in cash and cash equivalents are considered as cash inflows The decrease in cash and cash equivalents is called cash outflow. The conversion of cash and cash equivalents, such as withdrawals of cash from banks and short-term treasury bills purchased with cash, is not a cash flow. According to the nature of business activities, cash flow can be divided into cash flow from business activities, cash flow from investment activities and cash flow from financing activities.