Final answer:
The summary of money coming into and going out of a firm is called the cash flow statement, which tracks a company's cash receipts and payments. It consists of three main sections: operating activities, investing activities, and financing activities. Stakeholders use the cash flow statement to assess a company's financial performance and make strategic decisions.
Step-by-step explanation:
The summary of money coming into and going out of a firm is called the cash flow statement. This statement tracks a company's cash receipts and payments and provides an overview of its financial activities.The cash flow statement is divided into three main sections: operating activities, investing activities, and financing activities. Operating activities include cash inflows and outflows from a company's core operations, such as sales revenue and expenses. Investing activities include cash inflows and outflows from the buying and selling of assets. Financing activities include cash inflows and outflows from borrowing, issuing stock, or paying dividends. By analyzing the cash flow statement, stakeholders can assess a company's ability to generate cash, manage its expenses, and make strategic financial decisions.