Cash Flows

The Statement of Cash Flows, also known as the Cash Flow Statement, is a financial report that tracks the movement of cash both into and out of a business over a specific period of time. It provides a detailed view of how cash is generated and used in the company's operating, investing, and financing activities.

This statement is vital for understanding a company's cash management practices and its ability to generate cash to meet its obligations and fund its growth. By analyzing the cash flow statement, you can gain insights into:

• Operating activities: How much cash is generated from the company's core business operations?
• Investing activities: How much cash is invested in or generated from the purchase and sale of long-term assets?
• Financing activities: How much cash is raised from or used to repay debt and equity financing?

A well-structured cash flow statement can help businesses identify cash flow trends, assess their liquidity, and make informed decisions about their cash management strategies.