How the Financial Statements Work Together

The financial statements that relate to proprietary funds must work together to provide an accurate presentation of the agency's financial condition. The cash flow statement is designed to complement the other statements, rather than reproduce the same information on a cash basis.

There are several line items on the cash flow statement that will tie to line items on other statements. For instance, one of the cash flow statement's purposes is to show the net change in cash of an agency. Therefore, the statement calculates the change in cash and cash equivalents. This change must tie to the difference between beginning cash and cash equivalents reported in the prior year and the current year. Operating income reported in the reconciliation section must tie to operating income reported on the operating statement.

There are several other line items that must tie to the other statements. The next few pages display the statement of cash flows and how the amounts reported on it are derived from and supported by the other statements.

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