CASH FLOWS FROM OPERATING ACTIVITIES INCLUDE: Cash Receipts Cash Payments Collection from customers for sale of goods and services Payments to suppliers of merchandise and services, including payments to employees Interest and Dividends received Payments of Interest & income taxes Other receipts from operations; Other expenditure relating to operations; For example, proceeds from settlement of litigation For example, payments in settlement of litigation. Net income is typically the first line item in the operating activities section of the cash flow statement. This value, which measures a business's profitability, is derived directly from the net income shown in the company's income statement for the corresponding period. The cash flow statement must then reconcile net income to net cash flows by adding back non-cash expenses such as depreciation and amortization. Similar adjustments are made for non-cash expenses or income such as share-based compensation or unrealized gains from foreign currency translation. The cash flows from the operating activities section also reflect changes in working capital. A positive change in assets from one period to the next is recorded as a cash outflow, while a positive change in liabilities is recorded as a cash inflow. Inventories, accounts receivable, tax assets, accrued revenue, and deferred revenue are common examples of assets for which a change in value will be reflected in cash flow from operating activities. Accounts payable, tax liabilities, and accrued expenses are common examples of liabilities for which a change in value is reflected in cash flow from operations. CASH FLOW FROM INVESTING ACTIVITIES INCLUDE: Cash Receipts Cash Payments Cash proceeds from selling investments and plant and intangible assets Payments to acquire investments and plant and intangible assets Cash proceeds from collecting principal amounts on loans Amount advanced to borrowers cash paid in mergers and acquisitions, purchase of marketable securities, and proceeds from the sale of assets CASH FLOW FROM FINANCING ACTIVITIES INCLUDE: Cash Receipts Cash Payments Proceeds from both short-term and longterm borrowing Repayment of amounts borrowed (excluding interest payments). Cash received from owners (for example, from issuing stock) Payments to owners, such as cash dividends. Proceeds from the issuance of stock, proceeds from the issuance of debt, dividends paid, cash paid to repurchase common stock, and cash paid to retire debt are all entries that should be included in the cash flow from financing activities section.