Cash Flow Statement
A Cash Flow Statement is one of the key financial statements in accounting. It shows how
cash moves in and out of a business during a specific period. Instead of focusing on profits
(like the income statement), it highlights the actual cash available, which is crucial for
understanding liquidity and financial health.
Key Components of a Cash Flow Statement
1. Operating Activities
o Cash generated or used in the core business operations.
o Examples: cash received from customers, payments to suppliers, wages,
taxes.
2. Investing Activities
o Cash spent or earned from investments in long-term assets.
o Examples: purchase or sale of property, equipment, or investments.
3. Financing Activities
o Cash flows related to funding the business.
o Examples: issuing shares, borrowing loans, repaying debts, paying dividends.
