Reconciling profit to cash under IAS 7: operating, investing and financing activities.
Profit is not the same as cash. A business can be profitable yet run out of cash. The statement of cash flows (IAS 7) shows how the cash balance changed over the year, grouped into three activities.
The three activities
| Section | Examples |
|---|---|
| Operating activities | cash from trading: profit adjusted for non-cash items and working-capital changes |
| Investing activities | buying/selling non-current assets |
| Financing activities | issuing shares, raising/repaying loans, paying dividends |
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