Cash Flow Statement
Definition
Cash Flow Statement is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.
Benefits
A cash flow statement helps businesses see if they are making more money than they spend. It`s key for managing money wisely.
Frequently Asked Questions
What is the cash flow statement of a financial statement? The cash flow statement is part of a company`s financial reports. It tracks the flow of money in and out during a specific period.
Can you make a cash flow statement from a balance sheet and income statement? Yes, you can create a cash flow statement using a balance sheet and income statement. They provide the needed details on cash movement.
What is the income statement and the statement of cash flow? The income statement shows a company`s earnings and expenses. The cash flow statement shows how cash changes because of those earnings and expenses.
Summary
A cash flow statement is crucial for understanding a business`s cash health. It helps in making smart financial decisions.