Cash Flow Statement

Cash Flow Statement (Definition)

A cash flow statement is a financial statement that provides aggregate data regarding all cash inflows and outflows a company receives.

Key aspects of the cash flow statement include:

1. Shows how changes in balance sheet accounts and income affect cash and cash equivalents
2. Divided into operating, investing, and financing activities
3. Helps assess a companys ability to generate cash to pay debts and fund operations
4. Provides insights into a companys liquidity and solvency
5. Used alongside the balance sheet and income statement for comprehensive financial analysis
6. Can reveal discrepancies between reported earnings and actual cash position
7. Essential for investors and creditors in evaluating a companys financial health

The cash flow statement is a crucial tool for understanding a companys cash position and financial performance.