In this video, I explain the structure of the cash flow statement with its 3 components:

• Cash from Operations
• Cash from Investing
• Cash from Financing

I also explain that the cash flow statement does not take into account movements in debt and that these movements can be significant. A company like Amazon which uses finance leases to acquire much of its assets will report a FCF number which if based on the cash flow alone, will be overstated. It’s a little beyond the scope of this course to go into a lot of detail on this, but I shall explain the reconciliation of the opening and closing debt later.