{"id":31580,"date":"2023-10-31T15:11:54","date_gmt":"2023-10-31T15:11:54","guid":{"rendered":"https:\/\/swoopfunding.com\/au\/?post_type=business-glossary&p=31580"},"modified":"2025-04-24T14:13:56","modified_gmt":"2025-04-24T14:13:56","slug":"cash-flow-statement","status":"publish","type":"business-glossary","link":"https:\/\/swoopfunding.com\/au\/business-glossary\/cash-flow-statement\/","title":{"rendered":"Cash flow statement"},"content":{"rendered":"

Definition\u00a0<\/h3>\n

A cash flow statement is a financial statement<\/a> that provides a summary of how a company manages its cash position over a specific period of time. It shows the inflows and outflows of cash and cash equivalents, categorising them into operating, investing, and financing activities.\u00a0<\/span><\/p>\n

What is a cash flow statement?<\/h3>\n

The primary purpose of a cash flow statement is to provide a detailed account of how changes in a company’s balance sheet<\/a> and income statement<\/a> affect its cash and cash equivalents. It helps stakeholders, including investors, creditors, and management, understand how the company generates and uses cash.<\/span><\/p>\n

There are three main categories:<\/span><\/p>\n

    \n
  1. Operating activities<\/b>: This section includes cash flows<\/a> from the core business operations of the company.<\/span><\/li>\n
  2. Investing activities<\/b>: This section covers cash flows from activities that involve long-term assets.\u00a0<\/span><\/li>\n
  3. Financing activities<\/b>: This section focuses on cash flows from transactions with the company’s owners and creditors.<\/span><\/li>\n<\/ol>\n

    The cash flow statement is a vital analytical tool for financial analysts, as it helps in evaluating the quality of a company’s earnings and its capacity to generate sustainable cash flows, and it provides insights into a company’s ability to withstand economic downturns or unforeseen financial challenges by showing its liquidity and cash flow management.<\/span><\/p>\n

    Example of cash flow statement<\/h4>\n\n\n
    Inflows<\/strong>:
    Software licensing fees:
    Sale of equipment:
    Issuance of new shares:

    Outflows<\/strong>:
    Payments to suppliers and expenses:
    Employee salaries:
    Utilities and rent;
    Investment in R&D project:
    Purchase of computer servers:
    Repayment of loan:
    Payment of dividends:<\/td>
    $500,000____<\/span>
    $30,000
    $150,000


    $270,000
    $50,000
    $20,000
    $100,000
    $40,000
    $50,000
    $30,000<\/td><\/tr>
    Net increase in cash:<\/td>$190,000<\/td><\/tr>
    Beginning cash balance:<\/td>$300,000<\/td><\/tr>
    Ending cash balance:<\/td>$490,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    This simplified cash flow statement demonstrates how cash is generated and used by a company in its activities during a specific period.<\/p>\n","protected":false},"author":1,"template":"","class_list":["post-31580","business-glossary","type-business-glossary","status-publish","hentry"],"acf":[],"featured_image_urls_v2":{"full":"","thumbnail":"","medium":"","medium_large":"","large":"","1536x1536":"","2048x2048":"","image_blog":"","image_blog_full":"","image_podcast":"","image_banking":"","image_blog_internal":"","image_blog_medium":"","image_single_banking":""},"post_excerpt_stackable_v2":"

    Definition\u00a0 A cash flow statement is a financial statement that provides a summary of how a company manages its cash position over a specific period of time. It shows the inflows and outflows of cash and cash equivalents, categorising them into operating, investing, and financing activities.\u00a0 What is a cash flow statement? The primary purpose of a cash flow statement is to provide a detailed account of how changes in a company’s balance sheet and income statement affect its cash and cash equivalents. It helps stakeholders, including investors, creditors, and management, understand how the company generates and uses cash. There…<\/p>\n","category_list_v2":"","author_info_v2":{"name":"root","url":"https:\/\/swoopfunding.com\/au\/author\/root\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/business-glossary\/31580","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/business-glossary"}],"about":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/types\/business-glossary"}],"author":[{"embeddable":true,"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/users\/1"}],"wp:attachment":[{"href":"https:\/\/swoopfunding.com\/au\/wp-json\/wp\/v2\/media?parent=31580"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}