What do you mean by Cash Flow statement?

What does O.A and F.A and I.A mean in this cash flow statement?

• Required: Prepare a cash flow statement for Rellis Limited for the year ended 31 December 2007 in accordance with IAS 7 using the direct method. Solution Notes to the cash flow statement 31/12/2006 Cash outflow cash & cash equivalents 1,100 -860 Working: Cash receipts from customers Opening debtors €2,130 Sales 24,000 Less closing debtors (€2,310+€260 Prov bd) -2,570 Cash received from customers 23,560 (O.A) Cash paid to suppliers Opening stock €1,800 Purchases... By deduction 14,100 Less closing stock 2,400 Cost of sales 13,500 Opening creditors €1,020 Purchases ... from above 14,100 Less closing creditors -1,260 Cash paid to suppliers 13,860 (O.A) Disposal of equipment NBV (€2,400,000-€800,000) €1,600 Profit on disposal 300 Proceeds from disposal €1,900 (I.A)

• Answer:

  If I remember my IFRS/IAS cashflow properly, the O, F and I stand for Operating, Financial and Investment, and the A is Activites. So: Operating Activities cashflows are basically cash generated from your usual day to day trade, e.g. selling stuff to customers and then buying more stuff, paying off your trading debts/creditors, collecting cash etc. Financial Activities: Would (I think!!) be things like paying off long term loans or taking on new finance. Investment Activities would be buying and selling your fixed assets (like plant and machinery, vehicles or investments in other companies), and the associated cashflows.