Answer the following question in only 'one' sentence :What do you mean by cash flow statement ? (2024)

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Answer the following question in only 'one' sentence :What do you mean by cash flow statement ? ›

A cash flow statement is a financial statement that provides aggregate data regarding all cash inflows that a company receives from its ongoing operations and external investment sources. It also includes all cash outflows that pay for business activities and investments during a given period.

A Cash Flow Statement is a statement showing inflows and outflows of cash and cash equivalents from operating, investing and financing activities of a company during a particular period. It explains the reasons of receipts and payments in cash and change in cash balances during an accounting year in a company.

Cash flow is the movement of money in and out of a company. Cash received signifies inflows, and cash spent is outflows. The cash flow statement is a financial statement that reports a company's sources and use of cash over time.

A cash flow statement is a valuable measure of strength, profitability, and the long-term future outlook of a company. The CFS can help determine whether a company has enough liquidity or cash to pay its expenses. A company can use a CFS to predict future cash flow, which helps with budgeting matters.

A cash flow analysis determines a company's working capital — the amount of money available to run business operations and complete transactions.

The cash flow statement shows all sources of cash and all of the uses of cash. Provides information about cash receipts (inflows) and cash payments (outflows). How does the statement of cash flows differ from the other major financial statements?

Example of a cash flow statement

Red dollar amounts decrease cash. For instance, when we see ($30,000) next to “Increase in inventory,” it means inventory increased by $30,000 on the balance sheet. We bought $30,000 worth of inventory, so our cash balance decreased by that amount. Black dollar amounts increase cash.

Examples of cash flow include: receiving payments from customers for goods or services, paying employees' wages, investing in new equipment or property, taking out a loan, and receiving dividends from investments.

A stream flowed gently down into the valley. The current flows into electric motors that drive the wheels. It works only in the veins, where the blood flow is slower. Large numbers of refugees continue to flow from the troubled region into the no-man's land.

In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities.

Why is cash flow important? ›

Your operating cashflow shows whether or not your business has enough money coming in to pay operating expenses, such as bills and payments to suppliers. It can also show whether or not you have money to grow, or if you need external investment or financing.

The Cash Flow Statement provides information about a business' ability to remain solvent (meet its obligations) and to grow.