There are two primary methods for preparing a cash flow statement:
1. Direct Method: This method involves directly listing all major operating cash receipts and payments. It provides a clear view of cash transactions but can be more challenging to prepare due to the detailed data required.
2. Indirect Method: This method starts with the net income and adjusts for changes in balance sheet accounts to convert the net income to a cash basis. It's more commonly used as it relies on information readily available from the income statement and balance sheet.