The Cash Flow Statement

The cash flow statement reports your company’s cash receipts and payments during a certain period of time. This financial statement tells you where your company’s cash came from, what the cash was used for, and the change in your company’s cash balance.

There are three main sections of a cash flow statement:

1. Cash Flows from Operating Activities – cash inflows and outflows associated with your company’s operations (i.e., the revenues and expenses reported on the income statement).
2. Cash Flows from Investing Activities – cash activities from loans, investments, and property, plant, and equipment.
3. Cash Flows from Financing Activities – reports changes in cash position related to the owners’ equity.

Over the next few blog posts, I’ll discuss each of the three parts of the cash flow statement.