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The statement of cash flows are from the balance sheet. What you look at is all items that effect cash in the company. Examples are accumulated depreciation from balance sheet is added back into statement of cash flows

All information from the statement of cash flows (SCF) is not from the balance sheet. In fact, accumulated depreciation is not even located on the SCF. Depreciation expense is added back to net income because it is a non-cash expense.

all expenses, income tax, pre paids, ect, also, any gains or losses on sale of investments are included back in. example, a gain on sale of investments are deducted from cash flow

Gain on sale is deducted from net income. This is because the number represented by gain on sale is not actual cash received, but cash less historical cost plus accum. depreciation. Consequently, gain is deducted from (loss added to) net income and cash received for the sale is recorded in the Investing section of the SCF.

This is a very long and complex topic. One of discussion here at my office. It is kind of a puzzle of sorts. If you are still confused after reading the TMF articles I would be happy to go over a specific SCF line by line and (try to) explain what is going on.

John...
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