Direct method
Financial Accounting glossary · Statement of Cash Flows
Definition
Presentation of operating cash flows listing gross cash receipts and payments by category; less commonly used.
Direct method in plain English
A cash flow statement shows where a company's actual cash came in and went out. The direct method reports the operating section like a plain bank statement: "$500,000 collected from customers, $200,000 paid to suppliers, $80,000 paid to employees," listing the real money in and out by category. It's the most intuitive way to read it, but most companies skip it (they use the "indirect method" instead) because gathering those gross figures is more work. Think of it as showing every deposit and withdrawal separately, rather than just explaining how your profit turned into cash.
Practice Direct method
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