Classify cash inflows and outflows as operating, investing, and financing activities.

- The statement of cash flows is divided into three main sections based on the fundamental business activities that a company engages in during a period:

- cash flows from operating activities, which encompass the cash inflows and outflows that relate to the determination of net income;

- cash flows from investing activities, which are related to acquisitions and disposals of long-term assets and investments; and

- cash flows from financing activities, which are related to the external financing of the company (debt or shareholders' equity).

- Some business activities take place without affecting cash and are referred to as noncash investing and financing activities.