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The multiple nuclei theory
Indirect Method
A way of calculating cash flow from operating activities by starting with net income and adjusting for changes in non-cash balance sheet items.
Financing Activities
Transactions that involve raising funds for the company, including issuing debt, issuing equity, and paying dividends.
Operating Activities
Business activities related to the day-to-day functions of a company, involving revenues and expenses.
Indirect Method
An approach used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to derive operating cash flows.
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