The statement of owner's equity presents a summary of the changesthat occurred in the owner's equity of the entity during a specific timeperiod， such as a month or a year。 Increases in owner's equity arise frominvestments by the owner and from net income earned during the period。Decreases result from withdrawals by the owner and from a net loss for theperiod。 Net income or net loss comes directly from the income statement。Investments and withdrawals by the owner are capital transactions betweenthe business and its owner， so they do not affect the income statement。 The statement of cash flows just shows the cash inflows and outflowsof a company during a period of time。 Cash inflows are referred to as thereceipts in cash and cash outflows just tell the payments in cash made bythe company。 It is really meaningful to investors and creditors of thecompany， because they may want to know how much actual cash thecompany's operations generate during a period and how thatcash is used。Items of cash flows are classified according to three main activities：operating activities， investing activities and financing activities。 Operatingactivities are referred to as the part of the day-to-day business of acompany。<br> ……
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