There are two methods of calculating cash flow of a business -- the direct and indirect methods. Direct cash flow involves simply adding all of a businesses' cash transactions in the operating ...

For the direct approach, corporations determine cash flow by adding up the total cash payments and receipts. For the indirect method, corporations deduct non-operating activities from net income ...

The profit or loss on the income statement is then used to calculate cash flow from operations. This is referred to as the indirect method. Another technique, called the direct method, can also be ...

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