What does the statement of cash flows begin with?

The statement of cash flows begins with the net income for the same period from the income statement because it serves as a starting point to assess the cash generated or used by the company's operating activities. This net income figure reflects the company's profitability and includes both cash and non-cash transactions. Following this, adjustments are made to convert the net income from the accrual basis of accounting to the cash basis, accounting for changes in working capital and non-cash items such as depreciation. By beginning with net income, stakeholders can see how well the company turns its profit into actual cash flows, which is crucial for evaluating liquidity and operational efficiency.