Lecture 11 - adm1340 - statement of cash flows. What the company did with the cash. Company"s ability to generate future cash flows. Investing and financing transactions during the period, and effect upon capital structure. Cash equivalents are short-term and highly liquid trading investments that are readily converted to cash within a short period of time (usually within three months) Cash receipts and payments are classified into three categories: Cash effects of transactions that create revenues and expenses that enter into determination of profit. Includes relevant non-cash current assets and current liabilities on the statement of financial position. The related accounts of operating activities can be found on the income statement. Long-lived assets and long-term investments not held for trading. Generally includes non-current asset items (e. g. , long-lived investments, property, plant, and equipment) on the statement of financial position. Financing activities are results in changes in the size and composition of the equity and borrowings of a company.