The Direct Method for cash flow is a presentation style used in the cash flow statement to detail a business's operating activities directly. Rather than adjusting net income with changes in working capital and other adjustments, as in the Indirect Method, the Direct Method lists out actual cash receipts and payments. This includes cash collected from customers, cash paid to suppliers, wages, taxes, and other operational cash payments. By providing this breakdown, it offers clearer insights into the specific cash movements from the company's core operations.

For example, instead of starting with net income and making adjustments, a company might show "Cash received from customers: $50,000" and "Cash paid to suppliers: $30,000." This direct approach details the cash basis transactions during the accounting period. It is particularly useful for stakeholders who want transparency in understanding exactly where the operational cash is being utilized or sourced. Despite its advantages, the Direct Method is less commonly used due to the complexity in gathering necessary cash transaction data. Terms related to this include 'Cash Flow Statement', 'Operating Activities', and 'Accrual Accounting'.