Cash Flow Statement

Widely known as CFS it accounts for the amount of cash entering and exiting any company in the span of accounting period. It’s an add-on to the balance sheet and income statement and is widely used by investor s to analyzed loan paying capacity and short term liquidity and viability of the firm. The cash flow is broken down and analyzed as operating, investing and financing activity which helps us in determining health of the company.

The Cash Flow in these activities had different implications for the firm. Most important is the operating cash flow because it signifies the core strength of the company. It includes: 

Accounts Receivable
Inventory
Supplies
Prepaid Insurance
Other Current Assets
Notes Payable (generally due within one year)
Accounts Payable
Wages Payable
Payroll Taxes Payable
Interest Payable
Income Taxes Payable
Unearned Revenues
Other Current Liabilities

It depends on the business model. Investment companies or banks will have different kind of operating asset which will include loans, interest earn as it will be part of their operations. The biggest take away from operating cash flow is by comparing it with income statement. If operating cash flow is more than income it means company basic operation is good and its getting into better shape, if operating cash flow is net than income statement then somewhere down the line operations is facing certain problem and one should look into the matter.

Investment cash flow is the investment that the company is doing in acquiring certain assets, plant and machinery, giving loans, buying security, lands and R&D. such investment has future implication and it is one of the core reason behind the difference between operating cash flow and income statement. It includes

Notes Payable (generally due after one year) 
Bonds Payable 
Deferred Income Taxes 
Preferred Stock 
Paid-in Capital in Excess of Par-Preferred Stock 
Common Stock 
Paid-in Capital in Excess of Par-Common Stock 
Paid-in Capital from Treasury Stock 
Retained Earnings 
Treasury Stock

Financing activating or financial cash flow includes how the company is financing its activities. It talks about the debt and equity of company.  This cash flow thus gives guideline about current state of the company. It includes holders' equity accounts, such as:

Notes Payable (generally due after one year) 
Bonds Payable 
Deferred Income Taxes 
Preferred Stock 
Paid-in Capital in Excess of Par-Preferred Stock 
Common Stock 
Paid-in Capital in Excess of Par-Common Stock 
Paid-in Capital from Treasury Stock 
Retained Earnings 
Treasury Stock

A change in balance sheet will be shown in cash flow statement as such

A change in this  balance sheet category		...is reported in this section  of the cash flow statement
Current Assets*		Operating Activities
Current Liabilities		Operating Activities
Long-term Assets		Investing Activities
Long-term Liabilities		Financing Activities
Stockholders' Equity		Financing Activities
*This refers to current assets other than Cash. For details on How to Prepare one can visit the link.

http://www.accountingcoach.com/online-accounting-course/06Xpg03.html

An Example of cash Flow