Imagine a company such as General Electric using the direct method to prepare its cash flow statement, which essentially is like going through the company's entire bank statement.

The direct method uses gross cash receipts and gross cash payments to prepare cash flow statements. This includes money paid to suppliers, receipts from customers, interest and dividends received, ...

The direct method of preparing a cash flow statement differs from the indirect method only in the operations section. The investments and financing sections are identical.