A Cash Flow Statement is a financial statement that shows the amount of cash and cash equivalents that flow into and out of a company during a specific period of time. It provides information about a company’s operating, investing, and financing activities, and is an important tool for assessing a company’s financial health.
The cash flow statement is divided into three sections: operating activities, investing activities, and financing activities. Each section provides information about the sources and uses of cash during the period covered by the statement.
To read and use a cash flow statement, it is important to understand the following:
In summary, the cash flow statement provides valuable information about a company’s sources and uses of cash, and can be used to evaluate the company’s ability to generate cash from its operations, invest in growth opportunities, and obtain financing. By understanding the information presented on the cash flow statement, investors and other stakeholders can gain a better understanding of the company’s financial health and make more informed decisions about their investments.