CASH FLOW STATEMENT:
A cash flow statement, also known as a statement of cash flows, is a financial document that provides information about the inflow and outflow of cash in a company during a specific period of time. The statement is used to track a company’s liquidity and its ability to generate cash. It is one of the three primary financial statements, along with the balance sheet and income statement.
The cash flow statement is divided into three sections: operating activities, investing activities, and financing activities.
Operating Activities:- Operating activities show the cash generated by a company’s primary business operations, such as sales and the payment of expenses.
Investing Activities:- Investing activities show the cash used for long-term investments, such as purchasing property or equipment, or investing in other companies.
Financing Activities:- Financing activities show the cash generated or used by a company’s financing activities, such as issuing debt or stock or repaying debt.
The cash flow statement is an important tool for investors, lenders, and analysts to understand a company’s financial health and its ability to generate cash in the future. By analyzing the cash flow statement, they can assess the company’s ability to pay its bills, make investments, and distribute dividends to shareholders.